1

THIRD DIVISION bus, and Perla Compania de Seguros, as insurer of Metro Cebu. The case was
docketed as Civil Case No. CEB-6108.
G.R. No. 139875 December 4, 2000
"On November 9, 1987, upon motion of [Petitioner] Pestaño, Judge Pedro C. Son
ordered the consolidation of the said case with Criminal Case No. 10624, pending in
GREGORIO PESTAÑO and METRO CEBU AUTOBUS CORPORATION, petitioners,
Branch 16 of the same Court, involving the criminal prosecution of Gregorio Pestaño
vs.
for [d]ouble [h]omicide thru [r]eckless [i]mprudence. Joint trial of the two cases
Spouses TEOTIMO SUMAYANG and PAZ C. SUMAYANG, respondents.
thereafter ensued, where the following assertions were made:

PANGANIBAN, J.:
Factual findings of the Court of Appeals, affirming those of the trial judge, are binding on this
Court. In quasi-delicts, such findings are crucial because negligence is largely a matter of
evidence. In computing an award for lost earning capacity, the life expectancy of the deceased,
not that of the heir, is used as basis.
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the
April 21, 1999 Decision and the August 6, 1999 Resolution of the Court of Appeals1 (CA) in CA-
GR CV No. 30289. The questioned Decision disposed as follows:
"WHEREFORE, premises considered, the instant appeal is hereby DENIED. The
assailed Decision of the lower court is hereby AFFIRMED with the aforesaid
modification regarding the award of death penalty."
The Resolution of August 6, 1999 denied reconsideration.2
The Facts
The events leading to this Petition were summarized by the Court of Appeals as
follows:
'[Respondents] rely mainly on the testimonies of Ignacio Neis, Pat. Aquilino
Dinoy and Teotimo Sumayang, father of the deceased. Neis declared that
he saw the incident while he was sitting on a bench beside the highway; that
both vehicles c[a]me from the North; that as the motorcycle approached the
junction to Tab[a]gon, the driver Ananias Sumayang signalled with his left
arm to indicate that he was taking the Tab[a]gon Road; that the motorcycle
did turn left but as it did so, it was bumped by an overspeeding bus; that the
force of the impact threw Ananias Sumayang and his companion Manuel
Romagos about 14 meters away. The motorcycle, Neis continued, was
badly damaged as it was dragged by the bus.
'On the other hand, Pat. Dinoy testified that he was in the nearby house of
Ruben Tiu [when] he heard the sound or noise caused by the collision; that
he immediately went to the scene where he found Ananias Sumayang and
Manuel Romagos lying on the road bleeding and badly injured; that he
requested the driver of a PU vehicle to take them to a hospital; that he took
note of the various distances which he included in his sketch (Exh. J) that
the probable point of impact was at the left lane of the highway and right at
the junction to Tab[a]gon (Exh J-11); that he based his conclusion on the
'scratches' caused by the motorcycle's footrest on the asphalt pavement;
that he described the damage caused to the motorcycle in his sketch (Exh
J); that on the part of the bus, the right end of its front bumper was bent and
the right portion of the radiator grill was dented. Pat. Dinoy acknowledged
that he met at the scene Ignacio Neis who informed him that he saw the
incident.

"It appears from the records that at around 2:00 o'clock [o]n the afternoon of August 9,
1986, Ananias Sumayang was riding a motorcycle along the national highway in
Ilihan, Tabagon, Cebu. Riding with him was his friend Manuel Romagos. As they
came upon a junction where the highway connected with the road leading to Tabagon,
they were hit by a passenger bus driven by [Petitioner] Gregorio Pestaño and owned
by [Petitioner] Metro Cebu Autobus Corporation (Metro Cebu, for brevity), which had
tried to overtake them, sending the motorcycle and its passengers hurtling upon the
pavement. Both Ananias Sumayang and Manuel Romagos were rushed to the
hospital in Sogod, where Sumayang was pronounced dead on arrival. Romagos was
transferred to the Cebu Doctors' Hospital, but he succumbed to his injuries the day
after.
'On the contrary, Pestaño blamed Sumayang for the accident. He testified
that when he first blew the horn the motorcycle which was about 15 or 20
meters ahead went to the right side of the highway that he again blew the
horn and accelerated in order to overtake the motorcycle; that when he was
just one meter behind, the motorcycle suddenly turned left towards the
Tab[a]gon [R]oad and was bumped by his bus; that he was able to apply his
break only after the impact. Pestaño's testimony was corroborated by Ireneo
Casilia who declared that he was one of the passengers of the bus; that the
motorcycle suddenly turned left towards Tab[a]gon [R]oad without giving
any signal to indicate its maneuver; that the bus was going at 40 kph when
the accident occurred.

'To substantiate its defense of bonos pater familias [petitioner] [c]orporation

"Apart from the institution of criminal charges against Gregorio Pestaño,
[Respondents] Teotimo and Paz Sumayang, as heirs of Ananias Sumayang, filed this
civil action for damages against Gregorio Pestaño, as driver of the passenger bus that
rammed the deceased's motorcycle, Metro Cebu, as owner and operator of the said
recalled to the witness box Gregorio Pestaño who explained how his driving
experience and ability were tested by the company before he was hired. He
further declared that the management gave regular lectures to drivers and
conductors touching on various topics like speeding, parking, loading and
treatment of passengers, and that before he took to the road at 2:30 AM of
 2
that day he checked together with the mechanic the tires, brake, signal
lights as well as the tools to be brought along. He did the same thing before
commencing his return trip from Hagnaya, San Remegio later in the day.
'The corporation also presented its maintenance supervisor, Agustin
Pugeda, Jr., and its manager, Alfonso Corominas, Jr. who corroborated
Pestaño's testimony that his driving ability was thoroughly tested, and that
all drivers underwent periodic lecture on various aspects of safety driving
including pertinent traffic regulations. They also confirmed the thorough
checkup of every vehicle before it would depart and that the performance of
the drivers was being monitored by several inspectors posted at random
places along the route.'
"In judgment, the lower court found [petitioners] liable to the [respondents], in the
amounts of P30,000.00 for death indemnity, P829,079 for loss of earning capacity of
the deceased Ananias Sumayang, and P36,000.00 for necessary interment expenses.
The liability of defendant Perla Compania de Seguros, Inc., however, was limited only
to the amount stipulated in the insurance policy, which [was] P12,000 for death
indemnity and P4,500.00 for burial expenses.
"In so ruling, the lower court found [Petitioner] Pestaño to have been negligent in
driving the passenger bus that hit the deceased. It was shown that Pestaño
negligently attempted to overtake the motorcycle at a dangerous speed as they were
coming upon a junction in the road, and as the motorcycle was about to turn left
towards Tabagon. The court likewise found Metro Cebu directly and primarily liable,
along with Pestaño, the latter's employer under Article 2180 of the Civil Code, as
[Petitioner] Metro Cebu failed to present evidence to prove that it had observed . . .
[the] diligence of a good father of a family to prevent damage. Nor has Metro Cebu
proven that it had exercised due diligence in the supervision of its employees and in
the maintenance of vehicles."3
Ruling of the Court of Appeals
The CA affirmed respondent's liability for the accident and for Sumayang's death. Pestaño was
negligent when he tried to overtake the victim's motorcycle at the Tabagon junction. As a
professional driver operating a public transport vehicle, he should have taken extra precaution to
avoid accidents, knowing that it was perilous to overtake at a junction, where adjoining roads
had brought about merging and diverging traffic.
The appellate court opined that Metro Cebu had shown laxity in the conduct of its operations and
in the supervision of its employees. By allowing the bus to ply its route despite the defective
speedometer, said petitioner showed its indifference towards the proper maintenance of its
vehicles. Having failed to observe the extraordinary diligence required of public transportation
companies, it was held vicariously liable to the victims of the vehicular accident.
In accordance with prevailing jurisprudence, the CA raised to P50,000 the granted indemnity for
the death of the victim. It also affirmed the award of loss of earning capacity based on his life
expectancy. Such liability was assessed, not as a pension for the claiming heirs, but as a penalty
and an indemnity for the driver's negligent act.
Hence, this Petition.4
Issues
Petitioners submit the following issues5 for our consideration:
1) The Court of Appeals misapplied facts of weight and substance affecting the result
of the case.
2) The Court of Appeals misapplied R.A. 4136 as regards the behavior of the
deceased at the time of the accident.
3) The Court of Appeals erred in ruling that the award of damages representing
income that deceased could have earned be considered a penalty.
4) The Court of Appeals, contrary to Article 2204, Civil Code, raised the award of
P30,000.00 damages representing indemnity for death to P50,000.00.
5) The Court of Appeals used as basis for the loss of earning capacity, the life
expectancy of the [d]eceased instead of that of the respondents which was shorter."6
In short, they raise these questions: whether the CA erred (1) in applying Section 45 of RA 4136
when it ruled that negligence in driving was the proximate cause of the accident; (2) in
increasing the civil indemnity from P30,000 to P50,000; and (3) in using the life expectancy of
the deceased instead of the life expectancies of respondents.
The Court's Ruling
The Petition has no merit.
First Issue: Negligence
Petitioners contend that Pestaño was not under any obligation to slow down when he overtook
the motorcycle, because the deceased had given way to him upon hearing the bus horn. Seeing
that the left side of the road was clearly visible and free of oncoming traffic, Pestaño accelerated
his speed to pass the motorcycle. Having given way to the bus, the motorcycle driver should
have slowed down until he had been overtaken.
They further contend that the motorcycle was not in the middle of the road nearest to the
junction as found by the trial and the appellate courts, but was on the inner lane. This explains
why the damage on the bus were all on the right side - the right end of the bumper and the right
portion of the radiator grill were bent and dented. Hence, they insist that it was the victim who
was negligent.
We disagree. Petitioners are raising a question of fact based on Pestaño's testimony
contradicting that of Eyewitness Ignacio Neis and on the location of the dents on the bumper and
the grill. Neis testified that as the two vehicles approached the junction, the victim raised his left
arm to signal that he was turning left to Tabagon, but that the latter and his companion were
thrown off the motorcycle after it was bumped by the overspeeding bus.
 3

These contentions have already been passed upon by the trial and the appellate courts. We find They contend that the CA used the wrong basis for its computation of earning capacity.
no cogent reason to reverse or modify their factual findings. The CA agreed with the trial court
that the vehicular collision was caused by Pestaño's negligence when he attempted to overtake
We disagree. The Court has consistently computed the loss of earning capacity based on the life
the motorcycle. As a professional driver operating a public transport bus, he should have
expectancy of the deceased,12 and not on that of the heir.13 Even Villa Rey Transit did likewise.
anticipated that overtaking at a junction was a perilous maneuver and should thus have
exercised extreme caution.
The award for loss of earning capacity is based on two factors: (1) the number of years on which
the computation of damages is based and (2) the rate at which the loss sustained by the heirs is
Factual findings of the CA affirming those of the trial court are conclusive and binding on this
fixed.14 The first factor refers to the life expectancy, which takes into consideration the nature of
Court. Petitioners failed to demonstrate that this case falls under any of the recognized
the victim's work, lifestyle, age and state of health prior to the accident. The second refers to the
exceptions to this rule.7 Indeed, the issue of negligence is basically factual and, in quasi-delicts,
victim's earning capacity minus the necessary living expenses. Stated otherwise, the amount
crucial in the award of damages.
recoverable is that portion of the earnings of the deceased which the beneficiary would have
received — the net earnings of the deceased.15
Petitioners aver that the CA was wrong in attributing the accident to a faulty speedometer and in
implying that the accident could have been avoided had this instrument been properly
WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED.
functioning.
Cost against petitioners.1âwphi1.nêt

This contention has no factual basis. Under Articles 2180 and 2176 of the Civil Code, owners
SO ORDERED.
and managers are responsible for damages caused by their employees. When an injury is
caused by the negligence of a servant or an employee, the master or employer is presumed to
be negligent either in the selection or in the supervision of that employee. This presumption may
be overcome only by satisfactorily showing that the employer exercised the care and the
diligence of a good father of a family in the selection and the supervision of its employee. 8

The CA said that allowing Pestaño to ply his route with a defective speedometer showed laxity
on the part of Metro Cebu in the operation of its business and in the supervision of its
employees. The negligence alluded to here is in its supervision over its driver, not in that which
directly caused the accident. The fact that Pestaño was able to use a bus with a faulty
speedometer shows that Metro Cebu was remiss in the supervision of its employees and in the
proper care of its vehicles. It had thus failed to conduct its business with the diligence required
by law.

Second Issue: Life Indemnity

Petitioners aver that the CA erred in increasing the award for life indemnity from P30,000 to
P50,000, without specifying any aggravating circumstance to justify the increment as provided in
the Civil Code.9

This contention is untenable. The indemnity for death caused by a quasi-delict used to be
pegged at P3,000, based on Article 2206 of the Civil Code. However, the amount has been
gradually increased through the years because of the declining value of our currency. At
present, prevailing jurisprudence fixes the amount at P50,000. 10

Third Issue: Loss of Earning Capacity

Petitioners cite Villa Rey Transit, Inc. v. Court of Appeals,11 which held:

"The determination of the indemnity to be awarded to the heirs of a deceased person has
therefore no fixed basis. . . . The life expectancy of the deceased or of the beneficiary, whichever
is shorter, is an important factor . . . "
 4
EN BANC
G.R. No. L-14342 May 30, 1960
CIRIACO L. MERCADO, petitioner,
vs.
THE COURT OF APPEALS, MANUEL QUISUMBING, JR., ET AL., respondents.
Abad Santos and Pablo for petitioner.
Sycip, Quisumbing, Salazar and Associates for respondents.
LABRADOR, J.:
This is a petition to review a decision of the Court of Appeals, which condemned petitioner to
pay P2,000 as moral damages and P50 for medical expenses, for a physical injury caused by
the son of petitioner, Augusto Mercado, on a classmate, Manuel Quisumbing, Jr., both pupils of
the Lourdes Catholic School, Kanlaon, Quezon City. The case had originated in the Court of
First Instance of Manila, Hon. Bienvenido A. Tan, presiding, which dismissed the complaint filed
by Manuel Quisumbing, Jr. and his father against petitioner, father of the above-mentioned
Mercado. The facts found by the Court of Appeals are as follows:
Plaintiff-appellant Manuel Quisumbing, Jr. is the son of his co-plaintiff-appellants Ana
Pineda and Manuel L. Quisumbing, while Augusto Mercado is the son of defendant-
appellee Ciriaco L. Mercado, Manuel Quisumbing, Jr. and Augusto Mercado were
classmates in the Lourdes Catholic School on Kanlaon, Quezon City. A "pitogo",
which figures prominently in this case, may be described as an empty nutshell used by
children as a piggy bank. On February 22, 1956, Augusto Mercado and Manuel
Quisumbing, Jr. quarrelled over a "pitogo". As a result, Augusto wounded Manuel, Jr.
on the right cheek with a piece of razor.
xxx xxx xxx
The facts of record clearly show that it was Augusto Mercado who started the
aggression. Undeniably, the "pitogo" belonged to Augusto Mercado but he lent it to
Benedicto P. Lim and in turn Benedicto lent it to Renato Legaspi. Renato was not
aware that the "pitogo" belonged to Augusto, because right after Benedicto gave it to
him, Benedicto ran away to get a basket ball with which they could play. Manuel
Quisumbing, Jr. was likewise unaware that the "pitogo" belonged to Augusto. He
thought it was the "pitogo" of Benedicto P. Lim, so that when Augusto attempted to get
the "pitogo" from Renato, Manuel, Jr. told him not to do so because Renato was better
at putting the chain into the holes of the "pitogo". However, Augusto resented Manuel,
Jr.'s remark and he aggresively pushed the latter. The fight started then. After Augusto
gave successive blows to Manuel, Jr., and the latter was clutching his stomach which
bore the brunt of Augusto's anger, Augusto seeing that Manuel, Jr. was in a helpless
position, cut him on the right check with a piece of razor.
xxx xxx xxx
Although the doctor who treated Manuel Quisumbing, Jr., Antonio B. Past, testified for
plaintiffs-appellants, he did not declare as to the amount of fees he collected from
plaintiff-appellants for the treatment of Manuel, Jr. the child was not even hospitalized
for the wound. We believe that the sum of P50.00 is a fair approximation of the
medical expenses incurred by plaintiffs-appellants.
xxx xxx xxx
The damages specified in paragraphs C and D of the aforequoted portion of plaintiffs-
appellant's complaint come under the class of moral damages. The evidence of record
shows that the child suffered moral damages by reason of the wound inflicted by
Augusto Mercado. Though such kind of damages cannot be fully appreciated in terms
of money, we believe that the sum of P2,000.00 would fully compensate the child.
As second cause of action, plaintiffs-appellants pray for P5,000.00 covering the moral
damages they allegedly suffered due to their son's being wounded; and the sum of
P3,000.00 as attorney's fees. The facts of record do not warrant the granting of moral
damages to plaintiffs-appellants Manuel Quisumbing and Ana Pineda. "In law mental
anguish is restricted, as a rule, to such mental pain or suffering as arises from an
injury or wrong to the person himself, as distinguished from that form of mental
suffering which is the accompaniment of sympathy or sorrow for another's suffering of
which arises from a contemplation of wrong committed on the person of another.
Pursuant to the rule stated, a husband or wife cannot recover for mental suffering
caused by his or her sympathy for the other's suffering. Nor can a parent recover for
mental distress and anxiety on account of physical injury sustained by a child or for
anxiety for the safety of his child placed in peril by the negligence of another." (15 Am.
Jur. 597). Plaintiffs-appellants are not entitled to attorney's fees, it not appearing that
defendant-appellee had wantonly disregarded their claim for damages.
In the first, second and third assignments of error, counsel for petitioner argues that since the
incident of the inflicting of the wound on respondent occurred in a Catholic School (during recess
time), through no fault of the father, petitioner herein, the teacher or head of the school should
be held responsible instead of the latter. This precise question was brought before this Court
in Exconde vs. Capuno and Capuno, 101 Phil., 843, but we held, through Mr. Justice Bautista:
We find merit in this claim. It is true that under the law above-quoted, "teachers or
directors of arts and trades are liable for any damage caused by their pupils or
apprentices while they are under their custody", but this provision only applies to an
institution of arts and trades and not to any academic educational institution (Padilla,
Civil Law, 1953 Ed., Vol. IV, p. 841; See 12 Manresa, 4th Ed., p. 557)
The last paragraph of Article 2180 of the Civil Code, upon which petitioner rests his claim that
the school where his son was studying should be made liable, is as follows:
ART. 2180. . . .
Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students or apprentices, so long as they remain
in their custody.
It would be seem that the clause "so long as they remain in their custody," contemplates a
situation where the pupil lives and boards with the teacher, such that the control, direction and
influence on the pupil supersedes those of the parents. In these circumstances the control or
 5

influence over the conduct and actions of the pupil would pass from the father and mother to the
teacher; and so would the responsibility for the torts of the pupil. Such a situation does not
appear in the case at bar; the pupils appear to go to school during school hours and go back to
their homes with their parents after school is over. The situation contemplated in the last
paragraph of Article 2180 does not apply, nor does paragraph 2 of said article, which makes
father or mother responsible for the damages caused by their minor children. The claim of
petitioner that responsibility should pass to the school must, therefore, be held to be without
merit.

We next come to the claim of petitioner that the moral damages fixed at P2,000 are excessive.
We note that the wound caused to respondent was inflicted in the course of an ordinary or
common fight between boys in a grade school. The Court of Appeals fixed the medical expenses
incurred in treating and curing the wound at P50. Said court stated that the wound did not even
require hospitalization. Neither was Mercado found guilty of any offense nor the scar in
Quisumbing's face pronounced to have caused a deformity, unlike the case of Araneta, et al. vs.
Arreglado, et al., 104 Phil., 529; 55 Off. Gaz. (9) 1561. Petitioner's counsel argues that if death
call for P3,000 to P6,000, certainly the incised wound could cause mental pain and suffering to
the tune of P2,000.

In the decision of the Court of Appeals, said court pronounces that the child Quisumbing
suffered moral damages "by reason of the wound inflicted by Augusto Mercado." While moral
damages included physical suffering, which must have been caused to the wounded boy
Quisumbing (Art. 2217, Civil Code), the decision of the court below does not declare that any of
the cases specified in Article 2219 of the Civil Code in which moral damages may be recovered,
has attended or occasioned the physical injury. The only possible circumstance in the case at
bar in which moral damages are recoverable would be if a criminal offense or a quasi-delict has
been committed.

It does not appear that a criminal action for physical injuries was ever presented. The offender,
Augusto Mercado, was nine years old and it does not appear that he had acted with discernment
when he inflicted the physical injuries on Manuel Quisumbing, Jr.

It is possible that the Court of Appeals may have considered Augusto Mercado responsible for or
guilty, of a quasi-delict causing physical injuries, within the meaning of paragraph 2 of Article
2219. Even if we assume that said court considered Mercado guilty of a quasi-delict when it
imposed the moral damages, yet the facts found by said court indicate that Augusto's
resentment, which motivated the assault, was occasioned by the fact that Manuel, Jr. had tried
to intervene in or interfere with the attempt of Mercado to get "his pitogo from Renato." This is,
according to the decision appealed from, the reason why Mercado was incensed and pushed
Quisumbing who, in turn, also pushed Mercado. It is, therefore, apparent that the proximate
cause of the injury caused to Quisumbing was Quisumbing's own fault or negligence for having
interfered with Mercado while trying to get the pitogo from another boy. (Art. 2179, Civil Code.)

After considering all the facts as found by the Court of Appeals, we find that none of the cases
mentioned in Article 2219 of the Civil Code, which authorizes the grant of moral damages, was
shown to have existed. Consequently, the grant of moral damages is not justified.

For the foregoing considerations, the decision appealed from is hereby reversed and the
petitioner is declared exempt or free from the payment of moral damages. The award of P50 for
medical expenses, however, is hereby affirmed. Without costs.
 6
FIRST DIVISION
G.R. No. 156224 February 19, 2008
HEIRS OF PANFILO F. ABALOS,1 petitioners,
vs.
AURORA A. BUCAL, DEMETRIO BUCAL, ARTEMIO F. ABALOS, LIGAYA U. ABALOS,
ROMULO F. ABALOS, JESUSA O. ABALOS, MAURO F. ABALOS and LUZVIMINDA R.
ABALOS, respondents.
DECISION
AZCUNA, J.:
This petition for review on certiorari under Rule 45 of the Rules on Civil Procedure assails the
August 31, 2001 Decision2 and November 20, 2002 Resolution3 of the Court of Appeals (CA) in
CA-G.R. CV No. 39138, which affirmed with modification the May 25, 1992 Decision4 of the
Regional Trial Court (RTC) of Lingayen, Pangasinan, Branch 39, in Civil Case No. 16289.
Prologue
On October 30, 1978, petitioners' father, Panfilo Abalos, filed before the RTC of Lingayen,
Pangasinan, a complaint5docketed as Civil Case No. 15465 for Partition, Annulment of Certain
Documents, Accounting and Damagesagainst Faustino Abalos, his brother, and Danilo Abalos,
his nephew and the only surviving heir of his brother Pedro Abalos. In the amended
complaint,6 Panfilo alleged that their father/grandfather, Francisco Abalos, died intestate and
was survived by his wife, Teodorica, and their children, namely: Maria, Faustino, Pedro, Roman
and Panfilo; that at the time of his death, Francisco left the following real properties:
xxx xxx xxx
a.) A parcel of residential land situated in Linoc, Binmaley, Pangasinan, containing an
area of 1,020 sq. meters, bounded on the North by Leoncio Dalmacio; On the East by
Dimas Perez; On the South by Callejon; And on the West by Magno Dalmacio;
declared under Tax Declaration No. 121 in the name of Francisco Abalos and
assessed at P255.50; [n]ot registered under Act 496 [or] under the Spanish
[M]ortgaged Law[;]
b.) A parcel of unirrigated riceland situated in Linoc, Binmaley, Pangasinan, containing
an area of 841 sq. meters, bounded on the North by Callejon; On the South by
Roberto Aquino; On the East by Eulalio Javier; And on the West by Hipolito Perez. It is
originally covered by Tax Declaration in the name of Francisco Abalos now covered by
Tax Declaration No. 14457 in the name of Faustino Abalos and assessed at P20.00[;]
[n]ot registered under Act 496 [or] under the Spanish [M]ortgaged Law;
c.) A parcel of unirrigated riceland situated in Linoc, Binmaley, Pangasinan, containing
an area of 1,196 sq. meters, bounded on the North by Callejon; On the East by
Estanislao Ferrer; On the South by Saturnino Aquino; And on the West by Hipolito
Perez[.] It is originally declared in the name of Francisco Abalos and now covered by
Tax Declaration No. 14458 in the name of Faustino Abalos and assessed at P30.00;
d.) A parcel of fishpond situated in Linoc, Binmaley, Pangasinan, containing an area of
1,158 sq. meters, bounded on the North by Doyao River; On the East by Hipolito
Perez; On the South by Leoncio Dalmacio; And on the West by Teodoro Abalos. It is
originally declared in the [name] of Francisco Abalos and now covered by Tax
Declaration No. 21592 in the name of Faustino Abalos and assessed at P370.00;
e.) A parcel of fishpond situated in Linoc, Binmaley, Pangasinan, containing an area of
1,158 sq. meters, bounded on the North by Leoncio Dalmacio; On the East by
Teodoro Abalos; On the South by Leoncio Dalmacio; And on the West by Evaristo
Dalmacio. It is originally declared in the name of Francisco Abalos and now covered
by Tax Declaration No. 21591 in the name of Faustino Abalos and assessed
at P370.00;
f.) A parcel of unirrigated riceland situated in Linoc, Binmaley, Pangasinan, containing
an area of 950 sq. meters[,] bounded on the North by Liberato Gonzalo; On the East
by Severina Catalan; On the South by Severina Catalan; And on the West by Barrio
Road of Linoc[;] [d]eclared under Tax Declaration No. 124 in the [name] of Francisco
Abalos and [a]ssessed at P20.00;
g.) A parcel of fishpond situated in Canaoalan, Binmaley, Pangasinan, containing an
area of 2,480 sq. meters, bounded on the North by Francisco Deogracias; On the East
by a Path; On the South by Ponciano Cayabyab; And on the West by Ponciano
Cayabyab[;] [d]eclared under Tax Declaration No. 122 in the name of Francisco
Abalos and assessed at P70.00;
h.) A parcel of fishpond situated in Canaoalan, Binmaley, Pangasinan, containing an
area of 1,585 sq. meters, bounded on the North by Adriano Gonzalo; On the East by
Florencio Perez; On the South by Pioquinto Ferrer; And on the West by Pator
Terrado[;] [d]eclared under Tax Declaration No. 123 in the name of Francisco Abalos
and assessed at P60.00;
i.) A parcel of little fishpond adjoining and North of the land described in paragraph 4
sub-paragraph (a) of this complaint whose Tax Declaration could not be produced by
the plaintiff;7
xxx xxx xxx
that said properties were administered by Teodorica; that following their mother's death, there
was a verbal agreement among Faustino, Pedro and Panfilo that Faustino would administer all
the properties left by their parents except those given by Teodorica to each of the siblings as
their partial advance inheritance; that taking undue advantage of his position and in clear breach
of the trust and confidence reposed on him, Faustino, by means of fraud and machination, took
possession of the properties given to Maria and Roman upon their death and transferred some
of the administered properties in his name and/or in the name of his heirs or disposed of them in
favor of third parties; that since his administration of the properties, Faustino has not made any
accounting of the produce, appropriating them almost to himself; and that Panfilo repeatedly
demanded the partition of the properties but Faustino refused to do so despite earnest efforts
towards amicable settlement.
After Panfilo rested his case and following the postponements at the instance of defendants, the
trial court, upon motion, declared that Faustino and Danilo were deemed to have waived their
 7
right to present evidence.8 On February 21, 1984, RTC Branch 37 of Lingayen, Pangasinan,
rendered its Decision,9 the dispositive portion of which stated:
WHEREFORE, judgment is hereby rendered ordering:
i. the partition of the intestate estate of the deceased Francisco Abalos in the following
manner
a. to the plaintiff, Panfilo Abalos, is the fishpond, Parcel D referred to as
"Duyao"; and ½ of fishpond, Parcel H referred to as "Pinirat" plus his
advance inheritance, Parcel F referred to as "Manga";
b. to defendant, Faustino Abalos, is the residential land where his house
stands and parcels A to I, plus his advance inheritance, Parcels [B] and C;
c. to defendant, Danilo Abalos, is that fishpond, parcel E referred to as
"Emong," and the ½ portion of the fishpond, Parcel H referred to as "Pinirat"
and his advance inheritance of his father Pedro Abalos, Parcel G.
ii. the defendant Faustino Abalos to reimburse to plaintiff the total amount
of P19,580.00, Philippine Currency, as plaintiff's lawful share from 1944;
iii. the annulment of all documents and/or instruments which transferred said
properties and are considered inconsistent with the above partition;
iv. the dismissal of defendants' counterclaim;
v. the defendants to pay the costs of the suit.
SO ORDERED.10
Despite the filing of a notice of appeal beyond the reglementary period, the trial court still gave
due course to the appeal of Faustino and Danilo; thus, Panfilo filed a petition for certiorari before
this Court, which subsequently referred the case to the Intermediate Appellate Court (IAC, now
the Court of Appeals).11 The IAC granted the petition and denied the motion for
reconsideration.12 On October 30, 1985, this Court affirmed the Decision.13 Upon the issuance of
an entry of judgment on November 4, 1985, the IAC ordered the remand of the case to the
RTC.14Thereafter, on December 11, 1985, the trial court issued a writ of execution in favor of
Panfilo.15
The Case
The instant case arose when petitioners' father, Panfilo, began to execute the Decision in Civil
Case No. 15465. In opposition, respondents, who are children and in-laws of the now deceased
Faustino, filed on January 8, 1986 a case for Quieting of Title, Possession, Annulment of
Document and Damages with Preliminary Injunction.16Docketed as Civil Case No. 16289, the
complaint alleged, among others, that:
xxx xxx xxx
III
Plaintiffs are the absolute owners and in actual possession of the following parcels of
land more particularly described, to wit:
(a.) A parcel of land (fishpond) with an approximate area of 289.5 square
meters, more or less, located at Linoc, Binmaley, Pangasinan. Bounded on
the North by the Duyao River; on the East by Faustino Abalos before, now
Romulo Abalos; on the South by Leoncio Dalmacio; and on the West by
Romulo Abalos. Declared in the name of Aurora A. Bucal under Tax [Dec.]
No. 1568 of the current land records of Binmaley, Pangasinan; assessed
value - P150.00;
(b.) A parcel of riceland located at Linoc, Binmaley, Pangasinan, containing
an area of 1,196 square meters, more or less. Bounded on the North by
Callejon; on the East by Estanislao Ferrer; on the South by Saturnino
Aquino; and on the West by Hipolito Ferrer. Declared in the names of
Artemio F. Abalos and Mauro F. Abalos under Tax [Dec.] No. 1007 of the
land records of Binmaley, Pangasinan; assessed value - P260.00;
(c.) A parcel of residential land located at Linoc, Binmaley, Pangasinan, with
an area of 1,029 square meters, more or less. Bounded on the North by
Leoncio Dalmacio; on the East by Dimas Perez; on the South by Callejon;
and on the West by Magno Dalmacio. Declared in the name of Romulo F.
Abalos under Tax [Dec.] No. 35 of the current land records of Binmaley,
Pangasinan; assessed value - P6,120.00;
(d.) A portion of fishpond located at Linoc, Binmaley, Pangasinan, with an
area of 289.5 square meters, more or less. Bounded on the North by the
Duyao River; on the East by Faustino Abalos; on the South by Leoncio
Dalmacio; and on the West by Teodoro Abalos. Declared in the name of
Romulo F. Abalos under Tax [Dec.] No. 33 of the current land records of
Binmaley, Pangasinan; assessed value - P180.00;
(e.) A portion (eastern) of fishpond located at Linoc, Binmaley, Pangasinan,
with an area of 579 square meters, more or less. Bounded on the North by
Leoncio Dalmacio; on the East by Teodoro Abalos; on the South by Leoncio
Abalos; and on the West by Evaristo Dalmacio. Declared in the names of
Artemio F. Abalos and Mauro F. Abalos under Tax [Dec.] No. 1009 of the
land records of Binmaley, Pangasinan; assessed value - P340.00;
(f.) A parcel of fishpond located at Canaoalan, Binmaley, Pangasinan, with
an area of 1,506 square meters, more or less. Bounded on the North by
Adriano Gonzalo; on the East by Florencio Perez; on the South by Pioquinto
Ferrer; and on the West by Pastor Terrado. Declared in the names of
Romulo F. Abalos and Mauro F. Abalos under Tax [Dec.] No. 1314 of the
land records of Binmaley, Pangasinan; assessed value - P970.00;
IV
 8

Parcel (a) above-described belongs in absolute ownership to spouses Aurora A. Bucal IX

and Demetrio Bucal who are in actual possession thereof as such, having acquired
the same by absolute sale from Romulo F. Abalos who in turn bought the same from
Parcel (f) above-described belongs in absolute common ownership to spouses
Maria Abalos; that the latter in turn acquired the same by inheritance from her
Romulo F. Abalos and Jesusa O. Abalos and spouses Mauro F. Abalos and
deceased parents, Francisco Abalos and Teodorica Ferrer, who died on May 4, 1928
Luzviminda R. Abalos and are in actual possession as such having acquired the same
and June 2, 1945, respectively. A copy of the sale from Maria Abalos to Romulo F.
by absolute sale in 1978 as shown by a deed a copy of which is hereto attached as
Abalos is hereto attached as ANNEX "A" while the sale by Romulo F. Abalos to
ANNEX "P"; that Faustino in turn inherited the same from his deceased parents; and
Aurora A. Bucal is hereto attached as ANNEX "B". A copy of Tax [Dec.] No. 1568
that the present owners have declared the same for taxation purposes as shown by
covering said land is hereto attached as ANNEX "C";
Tax [Dec.] No. 1314 a copy of which is hereto attached as ANNEX "Q";

V
X

Parcel (b) above-described belongs in absolute common ownership to the spouses

The possession of the present owners as well as their predecessors-in-interest have
Artemio F. Abalos and Ligaya U. Abalos and spouses Mauro F. Abalos and
always been in good faith, peaceful, public, exclusive, adverse, continuous and in the
Luzviminda R. Abalos who acquired the same by absolute sale in 1978 from Faustino
concept of absolute owners since their respective acquisition [up to] the present
Abalos as shown by a deed a copy of which is hereto attached as ANNEX "D"; that
without question from anyone, much less from the defendant herein. Said owners
the latter acquired the same by absolute sale from Bernardo Victorio in 1914, and that
have likewise religiously paid the taxes due on the lands [up to] the current year;17
Faustino Abalos donated the same in consideration of his marriage with Teodora
Ferrer as shown by a deed a copy of which is hereto attached as ANNEX "E". A copy
of Tax [Dec.] No. 1007 is hereto attached as ANNEX "F"; xxx xxx xxx

VI
Parcel (c) above-described belongs in absolute ownership to the spouses Romulo F.
Abalos and Jesusa O. Abalos and are in actual possession as such having acquired
the same by absolute sale from Aurora A. Bucal as shown by a deed a copy of which
is hereto attached as ANNEX "G"; that Aurora A. Bucal in turn bought the same from
Maria Abalos as shown by a deed a copy of which is hereto attached as ANNEX "H";
and that Maria Abalos inherited the same land from her deceased parents;
VII
Parcel (d) above-described belongs in absolute ownership to spouses Romulo F.
Abalos and Jesusa O. Abalos having acquired the same in 1978 by means of a deed
of quitclaim and renunciation of rights a copy of which is hereto attached as ANNEX
"I"; that Romulo F. Abalos declared the same for taxation purposes as shown by Tax
[Dec.] No. 33 a copy of which is hereto attached as ANNEX "J";
VIII
Parcel (e) above-described belongs in common absolute ownership to the spouses
Artemio F. Abalos and Ligaya U. Abalos and spouses Mauro F. Abalos and
Luzviminda R. Abalos having acquired the same from Maria Abalos as shown by two
(2) documents copies of which are hereto attached as ANNEXES "K" and "L"; that
Faustino and Maria bought the same from Genoveva Perez as shown by a deed a
copy of which is hereto attached as ANNEX "M"; that Genoveva Perez in turn bought
the same from Teodoro Abalos as shown by a deed a copy of which is hereto
attached as ANNEX "N"; that Mauro F. Abalos and Artemio F. Abalos have declared
the land in their names for taxation purposes as shown by Tax [Dec.] No. 1009 a copy
of which is hereto attached as ANNEX "O";
Respondents claimed that on two separate occasions in December 1985 Panfilo sought to
execute the decision by attempting to take possession of the lands in question through the use
of force, threat, violence and intimidation. In addition, to satisfy the damages awarded to Panfilo,
the deputy sheriff also levied upon parcels (b) and (c) above-described for the purpose of selling
the same at public auction, in regard to which they also filed their respective notice of third-party
claim. Respondents argued that to compel them to abide by the writ of execution and notice of
levy issued by the court in Civil Case No. 15465 would amount to deprivation of property without
due process of law because the decision rendered in said case is not binding upon them as they
were not made parties thereto and they became owners thereof prior to the institution of the
case.
On January 8, 1986, the trial court directed the parties to maintain the status quo pending the
resolution on the motion for the issuance of the writ of preliminary injunction. 1819
In the Objection to the Issuance of Writ of Preliminary Injunction,20 Answer,21 and Memorandum
of Authorities22filed by Panfilo, he stressed that the title, right or interest of respondents with
respect to the fishponds mentioned in sub-paragraphs (a), (d), and (f) of paragraph III of the
Complaint had already been declared null and void in Civil Case No. 15465 by a co-equal and
competent court and affirmed with finality by this Court. It was averred that respondents were
never in possession of the fishponds as he was the one peacefully placed in its possession by
the deputy sheriff. For failing to intervene in Civil Case No. 15465, Panfilo asserted that
respondents are now barred by the principles of res judicata and estoppel in pais.
On July 21, 1986, however, the trial court ordered the issuance of a writ of preliminary
injunction.23 Concurring with the position of respondents, it held that the principle of res
judicata does not apply since there is no identity of parties, subject matter, and causes of action
between Civil Case No. 15465 and the present case. In Civil Case No. 15465, the parties are
Panfilo, as plaintiff, and Faustino Abalos and Danilo Abalos, as defendants, while in the present
case, the parties are the children of Faustino Abalos and their respective spouses, as plaintiffs,
and Panfilo, as defendant; in the former, the principal action is for partition while in the latter, the
suit is for quieting of title, possession, annulment of document and damages. The trial court
 9
opined that while it is true that respondents Aurora, Artemio, Romulo, and Mauro are legitimate
children and compulsory heirs of Faustino Abalos, the documents showing their acquisition of
the properties in question revealed that they became owners thereof not through their father
alone but also by way of third persons who were not parties in Civil Case No. 15465. Moreover,
they acquired their ownership prior to the institution of said case.
Assailing the aforesaid Order, Panfilo filed a petition for certiorari before this Court. In a
Resolution, the petition was referred to the CA, which later dismissed the same for lack of merit
.24 The CA ruled that, for not being impleaded as parties, respondents are considered as "third
persons" in Civil Case No. 15465 since they did not in any way participate or intervene in the
partition. Neither did the trial court violate the principle that no court has the power to interfere by
injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction having
equal power. The CA viewed that the writ of execution was issued for the specific purpose of
levying upon the properties of Faustino Abalos, not that of respondents, as the judgment debtor
in Civil Case No. 15465.
On December 16, 1987, this Court, in G.R. No. 77965 entitled "Panfilo Abalos v. Aurora Bucal,
et al. and Court of Appeals," affirmed the CA decision, which resolution became final and
executory on August 2, 1988.25
Upon motion of respondents, the trial court ordered the issuance of an alias writ of preliminary
injunction on March 14, 1989.26 Again, Panfilo challenged the order via petition for certiorari with
prohibition before the CA but the same was denied.27 When the incident was elevated to this
Court, it was dismissed on November 15, 1989. The resolution became final and executory on
February 9, 1990.28
Meanwhile, in the proceedings before the trial court, Panfilo and respondents submitted their
respective pre-trial briefs.29 On October 23, 1989, the trial court issued the Pre-trial
Order.30 Taking into account the admissions made by the parties, particularly the fact that Panfilo
claimed proprietary rights only with respect to parcels (a), (d) and (f) mentioned in the complaint,
the court delimited the issues for resolution as follows:
The factual issues are: (1) With respect to parcels A, D, and F, whether or not the
plaintiffs claiming ownership and possession over said parcels are the lawful owners
and possessors thereof by virtue of genuine and duly executed documents of sale,
quitclaim and renunciation of rights; (2) Whether or not plaintiffs' predecessors-in-
interest were the lawful owners and possessors of parcels A, D and F; (3) Whether or
not Faustino Abalos and his wife [Teodorica] Ferrer were awarded the properties
subject of partition proceedings in Civil Case No. 15465; (4) Whether or not by virtue
of the decision rendered in that partition proceedings, the fishpond referred to as
Duyao which is parcel A, D and F was awarded; (5) Whether or not pursuant to the
decision of the Supreme Court in appealed case No. 713355 the defendant Panfilo
Abalos was placed in possession by the Deputy Sheriff Romulo Jimenez duly assisted
by the members of the police force of Binmaley, sometime on or about the last part of
December 1985.
The legal issues are: (1) Whether or not the decision in Civil Case No. 15465 entitled
"Panfilo Abalos versus Faustino Abalos["] is binding upon the plaintiffs who were not
impleaded as party litigants either as plaintiffs or defendants; (2) What is the legal
basis of the plaintiffs to file action to quiet title against the defendant?31
Likewise, in the course of the trial and in their respective memoranda, 32 the parties admitted that
parcels (a) and (d) are portions of a fishpond locally known as Duyao33 and are parts of parcel
(d) stated in the Complaint of Civil Case No. 15465, which was to be held in common pro-
indiviso by the heirs of Francisco Abalos.
Thus, the controversy was narrowed down to only two (2) properties, namely: the fishpond
located at Linoc, Binmaley, Pangasinan, locally known as Duyao, and the fishpond located at
Canaoalan, Binmaley, Pangasinan, locally known as Pinirat.
On May 25, 1992, RTC Branch 39 of Lingayen, Pangasinan, rendered its Decision, 34 ordering
thus:
WHEREFORE, judgment is hereby rendered declaring:
1. That the plaintiffs-spouses Aurora Bucal and Demetrio Bucal are the absolute
owners of one-fourth (¼) portion pro-indiviso of that fishpond which is locally known as
Duyao;
2. That the defendant Panfilo Abalos is the absolute owner of three-fourth (¾) portion
pro-indiviso of that fishpond locally known as "Duyao";
3. That the plaintiffs have no right whatsoever over the fishpond locally known as
"Pinirat" and confirming the adjudication thereof in Civil Case No. 15465; [and]
4. No award of damages, and no costs.
SO ORDERED.35
The trial court made the following factual findings: that the original owners of the two fishponds
were spouses Francisco Abalos and Teodorica Ferrer, who died on May 4, 1928 and June 2,
1945, respectively; that the spouses had five (5) children, namely: (a) Maria, who died single on
March 20, 1972; (b) Roman, who died single on June 10, 1944; (c) Panfilo, petitioner herein; (d)
Pedro, who died on May 11, 1971 and was survived by his only child, Danilo; and (e) Faustino,
whose children Aurora, Artemio, Romulo and Mauro are among the respondents herein; that
Roman predeceased his mother, hence, when the latter died only four of the siblings inherited
the Duyao, becoming its pro-indiviso co-owners; that on November 11, 1968, Maria sold her ¼
share to Romulo, who, in turn, sold the same to Aurora; that in view of the sale, the said portion
of the Duyao should have been excluded from the Decision in Civil Case No. 15465 for the
reason that said case refers to the partition of the estate only of spouses Francisco and
Teodorica; that Romulo is not the owner the other ¼ portion of the Duyao for failure to establish
his ownership thereon and also considering that it could have been the same ¼ portion that he
sold to Aurora; and that the Decision in Civil Case No. 15465 has res judicata effect with respect
to the Pinirat since the deed of sale executed by Faustino in favor of Romulo and Mauro was
simulated and employed merely to defraud the other heirs.
Both Panfilo and respondents elevated the case to the CA, assigning the alleged errors of the
trial court:
As to Panfilo -
 10
1. THE LOWER COURT ERRED IN ADJUDICATING ONE-FOURTH PORTION OF
THE FISHPOND KNOWN AS "DUYAO" TO PLAINTIFFS DEMETRIO BUCAL AND
AURORA ABALOS- BUCAL, NOTWITHSTANDING THAT SAID ENTIRE FISHPOND
WAS AWARDED TO DEFENDANT PANFILO ABALOS IN CIVIL CASE NO. 15465,
ENTITLED "PANFILO ABALOS VS. FAUSTINO ABALOS & DANILO ABALOS."
2. THE LOWER COURT ERRED IN ADJUDICATING ONE-FOURTH PORTION OF
THE FISHPOND KNOWN AS "DUYAO" TO PLAINTIFFS DEMETRIO BUCAL AND
AURORA ABALOS-BUCAL, AS ALLEGED INHERITANCE OF MARIA ABALOS
FROM HER LATE PARENTS, NOTWITHSTANDING THAT MARIA ABALOS
ALREADY INHERITED FROM HER LATE PARENTS THE PARCEL OF
RESIDENTIAL LAND DESCRIBED AS PARCEL (C) IN PLAINTIFF'S COMPLAINT.
3. THE LOWER COURT ERRED IN ADJUDICATING ONE-FOURTH PORTION OF
THE FISHPOND KNOWN AS "DUYAO" TO PLAINTIFFS DEMETRIO BUCAL AND
AURORA ABALOS-BUCAL, NOTWITHSTANDING THAT THE FINAL DECISION IN
CIVIL CASE [15465] EXPRESSLY ANNULLED ALL DOCUMENTS AND
INSTRUMENTS WHICH TRANSFERRED SAID PROPERTIES AND ARE
CONSIDERED INCONSISTENT WITH THE PARTITION ORDERED IN SAID CIVIL
CASE.
4. THE LOWER COURT ERRED IN NOT TREATING THE PLAINTIFFS AS IN
ESTOPPEL.
5. THE LOWER COURT HAD NO JURISDICTION OVER THE SUBJECT MATTER
OF THE PRESENT CASE.36
As to respondents -
1. THE TRIAL COURT ERRED IN NOT FINDING THAT THE LATE SPOUSES
FRANCISCO ABALOS AND TEODORICA FERRER LEFT AN INTESTATE ESTATE
CONSISTING OF FIVE PARCELS OF LAND ONLY.
2. THE TRIAL COURT ERRED IN NOT FINDING THAT ONE-FOURTH PRO
INDIVISO OF THE LAND KNOWN AS ["DUYAO"] WAS THE SHARE OF FAUSTINO
ABALOS, WHICH HE QUITCLAIMED IN FAVOR OF HIS SON ROMULO ABALOS,
AND IN APPLYING RES JUDICATA.
3. THE TRIAL COURT ERRED IN NOT FINDING THAT THE LAND KNOWN AS
"PINIRAT" WAS THE SHARE OF FAUSTINO ABALOS, WHICH HE SOLD TO HIS
SONS, THE PLAINTIFFS ROMULO AND MAURO ABALOS, AND IN APPLYING RES
JUDICATA.
4. THE TRIAL COURT ERRED IN VOIDING THE INSTRUMENTS OF TRANSFER
EXECUTED BY FAUSTINO ABALOS IN FAVOR OF ROMULO ABALOS OF HIS ¼
SHARE OF THE ["DUYAO"] LOT AND IN FAVOR OF MAURO ABALOS AND
ROMULO ABALOS OF THE "PINIRAT" LOT.
5. THE TRIAL COURT ERRED IN NOT UPHOLDING THE CLAIM OF PLAINTIFF
ROMULO ABALOS OVER ¼ OF THE ["DUYAO"] LOT AND THE CLAIM OF
PLAINTIFFS MAURO ABALOS AND ROMULO ABALOS OVER THE ["PINIRAT"]
LOT.37
On August 31, 2001, the CA rendered its Decision.38 According to the appellate court, the first
and second assigned errors of Panfilo are unmeritorious on the ground that the disposition of the
trial court in Civil Case No. 15465 insofar as the Duyao is concerned has no factual and legal
basis. It also held untenable his third and fourth assigned errors, noting that the principles of res
judicata and estoppel are not applicable in this case since respondents were not made parties to
Civil Case No. 15465 despite their acquisition of the contested parcels prior to the
commencement of said case. Finally, Panfilo's fifth assigned error was rejected, saying that this
Court already settled the issue of res judicata in G.R. No. 77965 when petitioner questioned the
propriety of the issuance of the writ of preliminary injunction.
On the other hand, the CA ruled that the first assigned error of respondents was rendered moot
and academic since it was stipulated and agreed upon during the pre-trial of the present case
that the dispute covers only parcels (a), (d) and (f). The second assigned error, nonetheless,
was affirmed, observing that the Duyao property was co-owned pro-indiviso by the four
remaining children of spouses Francisco and Teodorica; hence, Faustino's transfer of his ¼
share during his lifetime in favor of his son Romulo is perfectly legal. However, the CA denied
the third assigned error as it found that the Pinirat was Roman Abalos' advance legitime, which,
upon his death, was inherited by his remaining siblings. Since Maria subsequently died without
transferring her share, her part of the Pinirat should be divided among Pedro (which is
transmitted to Danilo), Faustino and Panfilo. As Faustino's share over the Pinirat is with respect
to 1/3 portion thereof, he could validly convey only such part to Romulo and Mauro.
The CA disposed:
WHEREFORE, premises considered, the assailed Decision of the court a quo in Civil
Case No. 16289 is hereby modified, as follows:
1. Being co-owners of Duyao Fishpond, plaintiffs-appellants Spouses Aurora Bucal
and Demetrio Bucal, plaintiffs-appellants Spouses Romulo Abalos and Jesusa O.
Abalos, defendant-appellant Panfilo Abalos and Danilo Abalos, in representation of his
deceased father, Pedro Abalos, should divide and distribute the same equally;
2. One-third of the Pinirat Fishpond is co-owned by plaintiffs-appellants Spouses
Romulo Abalos and Jesus Abalos, and Spouses Mauro Abalos and Luzviminda R.
Abalos; That defendant-appellant Panfilo Abalos is the sole owner of another 1/3
portion of the Pinirat fishpond; While the remaining 1/3 portion is for Danilo Abalos, in
representation of his deceased father Pedro Abalos;
3. No pronouncement as to cost.
SO ORDERED.39
Panfilo moved for reconsideration of the Decision but was denied. 40
Hence this petition.
 11
Echoing the same grounds relied upon by their father, petitioners now claim that the CA
seriously erred in failing to consider the finality of the Decision in Civil Case No. 15465.
According to them, the finding that respondents became owners of the subject properties prior to
the institution of said case in effect modified the disposition and distribution previously ordered.
Petitioners opine that when the CA ruled that respondents have acquired ownership of the
questioned parcels prior to the commencement of Civil Case No. 15465 it had disregarded the
conclusiveness of a final judgment rendered in said case which decreed the annulment of all
documents and/or instruments transferring said properties and were considered inconsistent
with the order of partition. They contend that sustaining the conclusion of the CA would allow the
re-opening of the factual issue of whether the documents, which were the source of
respondents' alleged title, were valid - an issue that was dealt with in an extensive hearing on
the merits conducted in said case and supported by testimonial and documentary evidence for
the purpose. Being the prevailing party in Civil Case No. 15465, in regard to which respondents
had remained silent and did not even care to intervene or question, petitioners assert that they
already acquired a vested right over the entire Duyao and ½ portion of the Pinirat. They also
oppose the CA's failure to recognize that estoppel and laches have already set in to bar
respondents from further pursuing their claims.
The petition is not meritorious.
Res judicata means "a matter adjudged; a thing judicially acted upon or decided; a thing or
matter settled by judgment." It lays the rule that an existing final judgment or decree rendered on
the merits, without fraud or collusion, by a court of competent jurisdiction, upon any matter within
its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions or suits
in the same or any other judicial tribunal of concurrent jurisdiction on the points and matters in
issue in the first suit.41
For the preclusive effect of res judicata to be enforced, however, the following requisites must be
present: (1) the judgment or order sought to bar the new action must be final; (2) the decision
must have been rendered by a court having jurisdiction over the subject matter and the parties;
(3) the disposition of the first case must be a judgment on the merits; and (4) there must be
between the first and second action, identity of parties, subject matter and causes of action. 42
In the instant case, the fourth requisite, in particular the identity of parties, is clearly wanting.
As found by the CA, this Court, through our earlier resolution in G.R. No. 77965, already settled
that res judicatadoes not apply in this case. In G.R. No. 77965, which Panfilo instituted to
challenge the propriety of the writ of preliminary injunction issued by the trial court, this Court
agreed with the CA's disposition that respondents are considered as third persons with respect
to Civil Case No. 15465 since they were not impleaded as defendants therein. This Court held
as in accordance with law and jurisprudence the CA's opinion that all those who did not in any
way participate or intervene in the partition case are considered third persons within the
contemplation of Article 499 of the Civil Code.43
The foregoing rule still stands.
Indeed, Panfilo, the father of petitioners, should have impleaded respondents when he filed Civil
Case No. 15465 since at that time the latter were already claiming ownership over the subject
fishponds, which were transferred in their names prior to the commencement of the case.
Petitioners cannot shift to respondents the burden of joining the case because they are not duty
bound to intervene therein and they have every right to institute an independent action: First,
intervention is not compulsory or mandatory but merely optional and
permissive;44 and Second, as the persons who are in actual possession of the fishponds they
claim to own, respondents may wait until their possession are in fact disturbed before taking
steps to vindicate their rights. Understandably, at the time of the institution and pendency of Civil
Case No. 15465, respondents still had no definite idea as to how the very nature of the partition
case could actually affect their possession.
On the other hand, Panfilo had personal knowledge that respondents acquired ownership of the
properties prior to the filing of Civil Case No. 15465, that they are in actual possession thereof,
and that they have declared the lands in their names for taxation purposes. Panfilo could not be
ignorant of these because he resided in the same locality where the properties are
found.45 Quite startling, however, is that he did not bother to implead respondents in the partition
case despite all these and the fact that the defendants therein raised the point that Faustino was
not the owner of some of the lands in question and that they belong to others not parties to the
case.46 As his successors-in-interest, petitioners must suffer from Panfilo's evident omission.
Even if res judicata requires not absolute but substantial identity of parties, still there exists
substantial identity only when the "additional" party acts in the same capacity or is in
privity with the parties in the former action.47 In this case, while it is true that respondents are
legitimate children and relatives by affinity of Faustino it is more important to remember that, as
shown by their documents of acquisition, they became owners of the subject fishponds not
through Faustino alone but also from a third person (i.e., Maria Abalos). Respondents are
asserting their own rights and interests which are distinct and separate from those of Faustino's
claim as a hereditary heir of Francisco Abalos. Hence, they cannot be considered as privies to
the judgment rendered in Civil Case No. 15465. Unfortunately for petitioners, they relied solely
on their untenable defense of res judicata instead of contesting the genuineness and due
execution of respondents' documentary evidence.
Moreover, Panfilo erred in repeatedly believing that there was no necessity to implead
respondents as defendants in Civil Case No. 15465 since, according to him, the necessary
parties in a partition case are only the co-owners or co-partners in the inheritance of Francisco
Abalos. On the contrary, the Rules of Court provides that in an action for partition, all other
persons interested in the property shall be joined as defendants. 48 Not only the co-heirs but also
all persons claiming interests or rights in the property subject of partition are indispensable
parties.49 In the instant case, it is the responsibility of Panfilo as plaintiff in Civil Case No. 15465
to implead all indispensable parties, that is, not only Faustino and Danilo but also respondents in
their capacity as vendees and donees of the subject fishponds. Without their presence in the suit
the judgment of the court cannot attain real finality against them. Being strangers to the first
case, they are not bound by the decision rendered therein; otherwise, they would be deprived of
their constitutional right to due process.50
Finally, it must be stressed that in a complaint for partition, the plaintiff seeks, first, a declaration
that he is a co-owner of the subject properties; and second, the conveyance of his lawful shares.
An action for partition is at once an action for declaration of co-ownership and for segregation
and conveyance of a determinate portion of the properties involved.51
Reyes-de Leon v. Del Rosario52 held:
The issue of ownership or co-ownership, to be more precise, must first be resolved in
order to effect a partition of properties. This should be done in the action for partition
itself. As held in the case of Catapusan v. Court of Appeals:
 12

'In actions for partition, the court cannot properly issue an order to divide the
property unless it first makes a determination as to the existence of co-
ownership. The court must initially settle the issue of ownership, the first
stage in an action for partition. Needless to state, an action for partition will
not lie if the claimant has no rightful interest over the subject property. In
fact, Section 1 of Rule 69 requires the party filing the action to state in his
complaint the 'nature and the extent of his title' to the real estate. Until and
unless the issue of ownership is definitely resolved, it would be premature to
effect a partition of the properties. x x x' (citations omitted)53

It is only properties owned in common that may be the object of an action for partition; it will not
lie if the claimant has no rightful interest over the subject property. Thus, in this case, only the
shares in the lots which are determined to have been co-owned by Panfilo, Faustino and Danilo
could be included in the order of partition and, conversely, shares in the lots which were validly
disposed of in favor of respondents must be excluded therefrom. In this connection, the Court
sees no reason to depart from the findings of fact and the partition ordered by the appellate court
as these are amply supported by evidence on record. Furthermore, the rule is that factual issues
are beyond our jurisdiction to resolve since in a petition for review under Rule 45 of the 1997
Rules of Civil Procedure this Court's power is limited only to review questions of law - when
there is doubt or difference as to what the law is on a certain state of facts. 54

WHEREFORE, the petition is DENIED and the August 31, 2001 Decision and November 20,
2002 Resolution of the Court of Appeals in CA-G.R. CV No. 39138 are AFFIRMED.

No costs.

SO ORDERED.
 13
FIRST DIVISION
G.R. No. 132266 December 21, 1999
CASTILEX INDUSTRIAL CORPORATION, petitioner,
vs.
VICENTE VASQUEZ, JR. and LUISA SO VASQUEZ, and CEBU DOCTORS' HOSPITAL,
INC., respondents.
DAVIDE, JR., C.J.:
The pivotal issue in this petition is whether an employer may be held vicariously liable for the
death resulting from the negligent operation by a managerial employee of a company-issued
vehicle.
The antecedents, as succinctly summarized by the Court of Appeals, are as follows:
On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So
Vasquez, was driving a Honda motorcycle around Fuente Osmeña
Rotunda. He was traveling counter-clockwise, (the normal flow of traffic in a
rotunda) but without any protective helmet or goggles. He was also only
carrying a Student's Permit to Drive at the time. Upon the other hand,
Benjamin Abad [was a] manager of Appellant Castilex Industrial
Corporation, registered owner [of] a Toyota Hi-Lux Pick-up with plate no.
GBW-794. On the same date and time, Abad drove the said company car
out of a parking lot but instead of going around the Osmeña rotunda he
made a short cut against [the] flow of the traffic in proceeding to his route to
General Maxilom St. or to Belvic St.
In the process, the motorcycle of Vasquez and the pick-up of Abad collided
with each other causing severe injuries to the former. Abad stopped his
vehicle and brought Vasquez to the Southern Islands Hospital and later to
the Cebu Doctor's Hospital.
On September 5, 1988, Vasquez died at the Cebu Doctor's Hospital. It was
there that Abad signed an acknowledgment of Responsible Party (Exhibit K)
wherein he agreed to pay whatever hospital bills, professional fees and
other incidental charges Vasquez may incur.
After the police authorities had conducted the investigation of the accident,
a Criminal Case was filed against Abad but which was subsequently
dismissed for failure to prosecute. So, the present action for damages was
commenced by Vicente Vasquez, Jr. and Luisa So Vasquez, parents of the
deceased Romeo So Vasquez, against Jose Benjamin Abad and Castilex
Industrial Corporation. In the same action, Cebu Doctor's Hospital
intervened to collect unpaid balance for the medical expense given to
Romeo So Vasquez.1
The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and ordered
Jose Benjamin Abad (hereafter ABAD) and petitioner Castilex Industrial Corporation (hereafter
CASTILEX) to pay jointly and solidarily (1) Spouses Vasquez, the amounts of P8,000.00 for
burial expenses; P50,000.00 as moral damages; P10,000.00 as attorney's fees; and
P778,752.00 for loss of earning capacity; and (2) Cebu Doctor's Hospital, the sum of P50,927.83
for unpaid medical and hospital bills at 3% monthly interest from 27 July 1989 until fully paid,
plus the costs of litigation.2
CASTILEX and ABAD separately appealed the decision.
In its decision3 of 21 May 1997, the Court of Appeals affirmed the ruling of the trial court holding
ABAD and CASTILEX liable but held that the liability of the latter is "only vicarious and not
solidary" with the former. It reduced the award of damages representing loss of earning capacity
from P778,752.00 to P214,156.80; and the interest on the hospital and medical bills, from 3%
per month to 12% per annum from 5 September 1988 until fully paid.
Upon CASTILEX's motion for reconsideration, the Court of Appeals modified its decision by (1)
reducing the award of moral damages from P50,000 to P30,000 in view of the deceased's
contributory negligence; (b) deleting the award of attorney's fees for lack of evidence; and (c)
reducing the interest on hospital and medical bills to 6% per annum from 5 September 1988 until
fully paid.4
Hence, CASTILEX filed the instant petition contending that the Court of Appeals erred in (1)
applying to the case the fifth paragraph of Article 2180 of the Civil Code, instead of the fourth
paragraph thereof; (2) that as a managerial employee, ABAD was deemed to have been always
acting within the scope of his assigned task even outside office hours because he was using a
vehicle issued to him by petitioner; and (3) ruling that petitioner had the burden to prove that the
employee was not acting within the scope of his assigned task.
Jose Benjamin ABAD merely adopted the statement of facts of petitioner which holds fast on the
theory of negligence on the part of the deceased.
On the other hand, respondents Spouses Vasquez argue that their son's death was caused by
the negligence of petitioner's employee who was driving a vehicle issued by petitioner and who
was on his way home from overtime work for petitioner; and that petitioner is thus liable for the
resulting injury and subsequent death of their son on the basis of the fifth paragraph of Article
2180. Even if the fourth paragraph of Article 2180 were applied, petitioner cannot escape liability
therefor. They moreover argue that the Court of Appeals erred in reducing the amount of
compensatory damages when the award made by the trial court was borne both by evidence
adduced during the trial regarding deceased's wages and by jurisprudence on life expectancy.
Moreover, they point out that the petition is procedurally not acceptable on the following
grounds: (1) lack of an explanation for serving the petition upon the Court of Appeals by
registered mail, as required under Section 11, Rule 13 of the Rules of Civil Procedure; and (2)
lack of a statement of the dates of the expiration of the original reglementary period and of the
filing of the motion for extension of time to file a petition for review.
For its part, respondent Cebu Doctor's Hospital maintains that petitioner CASTILEX is indeed
vicariously liable for the injuries and subsequent death of Romeo Vasquez caused by ABAD,
 14
who was on his way home from taking snacks after doing overtime work for petitioner. Although
the incident occurred when ABAD was not working anymore "the inescapable fact remains that
said employee would not have been situated at such time and place had he not been required
by petitioner to do overtime work." Moreover, since petitioner adopted the evidence adduced by
ABAD, it cannot, as the latter's employer, inveigle itself from the ambit of liability, and is thus
estopped by the records of the case, which it failed to refute.
We shall first address the issue raised by the private respondents regarding some alleged
procedural lapses in the petition.
Private respondent's contention of petitioner's violation of Section 11 of Rule 13 and Section 4 of
Rule 45 of the 1997 Rules of Civil Procedure holds no water.
Sec. 11 of Rule 13 provides:
Sec. 11. Priorities in modes of services and filing. — Whenever practicable,
the service and filing of pleadings and other papers shall be done
personally. Except with respect to papers emanating from the court, a resort
to other modes must be accompanied by a written explanation why the
service or filing was not done personally. A violation of this Rule may be
cause to consider the paper as not filed.
The explanation why service of a copy of the petition upon the Court of Appeals was done by
registered mail is found on Page 28 of the petition. Thus, there has been compliance with the
aforequoted provision.
As regards the allegation of violation of the material data rule under Section 4 of Rule 45, the
same is unfounded. The material dates required to be stated in the petition are the following: (1)
the date of receipt of the judgment or final order or resolution subject of the petition; (2) the date
of filing of a motion for new trial or reconsideration, if any; and (3) the date of receipt of the
notice of the denial of the motion. Contrary to private respondent's claim, the petition need not
indicate the dates of the expiration of the original reglementary period and the filing of a motion
for extension of time to file the petition. At any rate, aside from the material dates required under
Section 4 of Rule 45, petitioner CASTILEX also stated in the first page of the petition the date it
filed the motion for extension of time to file the petition.
Now on the merits of the case.
The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX presumes said
negligence but claims that it is not vicariously liable for the injuries and subsequent death
caused by ABAD.
Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only apply to
instances where the employer is not engaged in business or industry. Since it is engaged in the
business of manufacturing and selling furniture it is therefore not covered by said provision.
Instead, the fourth paragraph should apply.
Petitioner's interpretation of the fifth paragraph is not accurate. The phrase "even though the
former are not engaged in any business or industry" found in the fifth paragraph should be
interpreted to mean that it is not necessary for the employer to be engaged in any business or
industry to be liable for the negligence of his employee who is acting within the scope of his
assigned task.5
A distinction must be made between the two provisions to determine what is applicable. Both
provisions apply to employers: the fourth paragraph, to owners and managers of an
establishment or enterprise; and the fifth paragraph, to employers in general, whether or not
engaged in any business or industry. The fourth paragraph covers negligent acts of employees
committed either in the service of the branches or on the occasion of their functions, while the
fifth paragraph encompasses negligent acts of employees acting within the scope of their
assigned task. The latter is an expansion of the former in both employer coverage and acts
included. Negligent acts of employees, whether or not the employer is engaged in a business or
industry, are covered so long as they were acting within the scope of their assigned task, even
though committed neither in the service of the branches nor on the occasion of their functions.
For, admittedly, employees oftentimes wear different hats. They perform functions which are
beyond their office, title or designation but which, nevertheless, are still within the call of duty.
This court has applied the fifth paragraph to cases where the employer was engaged in a
business or industry such as truck operators6 and banks.7 The Court of Appeals cannot,
therefore, be faulted in applying the said paragraph of Article 2180 of the Civil Code to this case.
Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an
employer is liable for the torts committed by employees within the scope of his assigned tasks.
But it is necessary to establish the employer-employee relationship; once this is done, the
plaintiff must show, to hold the employer liable, that the employee was acting within the scope of
his assigned task when the tort complained of was committed. It is only then that the employer
may find it necessary to interpose the defense of due diligence in the selection and supervision
of the employee.8
It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the time of the
tort occurrence. As to whether he was acting within the scope of his assigned task is a question
of fact, which the court a quo and the Court of Appeals resolved in the affirmative.
Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of Appeals
are entitled to great respect, and even finality at times. This rule is, however, subject to
exceptions such as when the conclusion is grounded on speculations, surmises, or
conjectures.9 Such exception obtain in the present case to warrant review by this Court of the
finding of the Court of Appeals that since ABAD was driving petitioner's vehicle he was acting
within the scope of his duties as a manager.
Before we pass upon the issue of whether ABAD was performing acts within the range of his
employment, we shall first take up the other reason invoked by the Court of Appeals in holding
petitioner CASTILEX vicariously liable for ABAD's negligence, i.e., that the petitioner did not
present evidence that ABAD was not acting within the scope of his assigned tasks at the time of
the motor vehicle mishap. Contrary to the ruling of the Court of Appeals, it was not incumbent
upon the petitioner to prove the same. It was enough for petitioner CASTILEX to deny that
ABAD was acting within the scope of his duties; petitioner was not under obligation to prove this
negative averment. Ei incumbit probatio qui dicit, non qui negat (He who asserts, not he who
denies, must prove). The Court has consistently applied the ancient rule that if the plaintiff, upon
whom rests the burden of proving his cause of action, fails to show in a satisfactory manner facts
which he bases his claim, the defendant is under no obligation to prove his exception or
defense. 10
 15
Now on the issue of whether the private respondents have sufficiently established that ABAD
was acting within the scope of his assigned tasks.
ABAD, who was presented as a hostile witness, testified that at the time of the incident, he was
driving a company-issued vehicle, registered under the name of petitioner. He was then leaving
the restaurant where he had some snacks and had a chat with his friends after having done
overtime work for the petitioner.
No absolutely hard and fast rule can be stated which will furnish the complete answer to the
problem of whether at a given moment, an employee is engaged in his employer's business in
the operation of a motor vehicle, so as to fix liability upon the employer because of the
employee's action or inaction; but rather, the result varies with each state of facts. 11
In Filamer Christian Institute v. Intermediate Appellant Court, 12 this Court had the occasion to
hold that acts done within the scope of the employee's assigned tasks includes "any act done by
an employee in furtherance of the interests of the employer or for the account of the employer at
the time of the infliction of the injury or damages."
The court a quo and the Court of Appeals were one in holding that the driving by a manager of a
company-issued vehicle is within the scope of his assigned tasks regardless of the time and
circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the
injurious incident is not of itself sufficient to charge petitioner with liability for the negligent
operation of said vehicle unless it appears that he was operating the vehicle within the course or
scope of his employment.
The following are principles in American Jurisprudence on the employer's liability for the injuries
inflicted by the negligence of an employee in the use of an employer's motor vehicle:
I. Operation of Employer's Motor Vehicle in Going to
or from Meals
It has been held that an employee who uses his employer's vehicle in going from his work to a
place where he intends to eat or in returning to work from a meal is not ordinarily acting within
the scope of his employment in the absence of evidence of some special business benefit to the
employer. Evidence that by using the employer's vehicle to go to and from meals, an employee
is enabled to reduce his time-off and so devote more time to the performance of his duties
supports the finding that an employee is acting within the scope of his employment while so
driving the vehicle. 13
II. Operation of Employer's Vehicle in Going to
or from Work
In the same vein, traveling to and from the place of work is ordinarily a personal problem or
concern of the employee, and not a part of his services to his employer. Hence, in the absence
of some special benefit to the employer other than the mere performance of the services
available at the place where he is needed, the employee is not acting within the scope of his
employment even though he uses his employer's motor vehicle. 14
The employer may, however, be liable where he derives some special benefit from having the
employee drive home in the employer's vehicle as when the employer benefits from having the
employee at work earlier and, presumably, spending more time at his actual duties. Where the
employee's duties require him to circulate in a general area with no fixed place or hours of work,
or to go to and from his home to various outside places of work, and his employer furnishes him
with a vehicle to use in his work, the courts have frequently applied what has been called the
"special errand" or "roving commission" rule, under which it can be found that the employee
continues in the service of his employer until he actually reaches home. However, even if the
employee be deemed to be acting within the scope of his employment in going to or from work in
his employer's vehicle, the employer is not liable for his negligence where at the time of the
accident, the employee has left the direct route to his work or back home and is pursuing a
personal errand of his own.
III. Use of Employer's Vehicle Outside Regular Working Hours
An employer who loans his motor vehicle to an employee for the latter's personal use outside of
regular working hours is generally not liable for the employee's negligent operation of the vehicle
during the period of permissive use, even where the employer contemplates that a regularly
assigned motor vehicle will be used by the employee for personal as well as business purposes
and there is some incidental benefit to the employer. Even where the employee's personal
purpose in using the vehicle has been accomplished and he has started the return trip to his
house where the vehicle is normally kept, it has been held that he has not resumed his
employment, and the employer is not liable for the employee's negligent operation of the vehicle
during the return trip. 15
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on the
doctrine of respondent superior, not on the principle of bonus pater familias as in ours. Whether
the fault or negligence of the employee is conclusive on his employer as in American law or
jurisprudence, or merely gives rise to the presumption juris tantum of negligence on the part of
the employer as in ours, it is indispensable that the employee was acting in his employer's
business or within the scope of his assigned task. 16
In the case at bar, it is undisputed that ABAD did some overtime work at the petitioner's office,
which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's Restaurant in
Fuente Osmeña, Cebu City, which is about seven kilometers away from petitioner's place of
business. 17 A witness for the private respondents, a sidewalk vendor, testified that Fuente
Osmeña is a "lively place" even at dawn because Goldie's Restaurant and Back Street were still
open and people were drinking thereat. Moreover, prostitutes, pimps, and drug addicts littered
the place. 18
At the Goldie's Restaurant, ABAD took some snacks and had a chat with friends. It was when
ABAD was leaving the restaurant that the incident in question occurred. That same witness for
the private respondents testified that at the time of the vehicular accident, ABAD was with a
woman in his car, who then shouted: "Daddy, Daddy!" 19 This woman could not have been
ABAD's daughter, for ABAD was only 29 years old at the time.
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a
personal purpose not in line with his duties at the time he figured in a vehicular accident. It was
then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours. ABAD's working
 16

day had ended; his overtime work had already been completed. His being at a place which, as "ACCORDINGLY, judgment is hereby rendered in favor of plaintiffs and against defendants,
petitioner put it, was known as a "haven for prostitutes, pimps, and drug pushers and addicts," ordering the latter to pay the former jointly and severally the following:
had no connection to petitioner's business; neither had it any relation to his duties as a manager.
Rather, using his service vehicle even for personal purposes was a form of a fringe benefit or
1) The amount of ₱160,715.19 as actual damage for the medical treatment so far of
one of the perks attached to his position.
plaintiff Zacarias Carticiano;

Since there is paucity of evidence that ABAD was acting within the scope of the functions
2) The amount of ₱100,000.00 to compensate the income and opportunities plaintiff
entrusted to him, petitioner CASTILEX had no duty to show that it exercised the diligence of a
Zacarias lost as a result of the incident;
good father of a family in providing ABAD with a service vehicle. Thus, justice and equity require
that petitioner be relieved of vicarious liability for the consequences of the negligence of ABAD in
driving its vehicle. 20 3) The amount of ₱173,788.00 for the damages sustained by the Ford Laser;

WHEREFORE, the petition is GRANTED, and the appealed decision and resolution of the Court 4) The amount of ₱200,000.00 as moral damages;
of Appeals is AFFIRMED with the modification that petitioner Castilex Industrial Corporation be
absolved of any liability for the damages caused by its employee, Jose Benjamin Abad.
5) The amount of ₱100,000.00 as exemplary damages;

SO ORDERED.
6) The amount of ₱100,000.00 as attorney’s fees and expenses of litigation.

THIRD DIVISION
With costs.

G.R. No. 138054 September 28, 2000

SO ORDERED."

ROSENDO C. CARTICIANO and ZACARIAS A. CARTICIANO, petitioners,

vs. The Facts
MARIO NUVAL, respondent.
The facts are summarized succinctly by the Court of Appeals as follows:
DECISION
"On September 3, 1992 at about 9:30 in the evening, plaintiff Zacarias Carticiano was on his
PANGANIBAN, J.: way home to Imus, Cavite. Plaintiff Zacarias was driving his father’s (plaintiff Rosendo
Carticiano) Ford Laser car, traversing the coastal roads of Longos, Bacoor, Cavite.

To hold an employer liable for the negligent acts of the employee, it is enough to prove that the
latter was hired to drive the former’s motor vehicle. It is not necessary to show, in addition, that
the employer’s children were aboard the jeep when the accident happened. Once the driver is
shown to be negligent, the burden of proof to free the employer from liability shifts to the latter.
Statement of the Case
"On the same date and time, defendant Nuval’s owner-type Jeep, then driven by defendant
Darwin was traveling on the opposite direction going to Parañaque.
"When the two cars were about to pass one another, defendant Darwin veered his vehicle to his
left going to the center island of the highway and occupied the lane which plaintiff Zacarias was
traversing.

Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court,
assailing the November 10, 1999 Decision2 of the Court of Appeals (CA)3 in CA-GR CV No. "As a result thereof, plaintiff Zacarias’ Ford Laser collided head-on with defendant Nuval’s Jeep.
Defendant Darwin immediately fled from the scene.
52316, which disposed as follows:

"WHEREFORE, [the] foregoing considered, the appealed decision is hereby AFFIRMED insofar
as defendant Darwin is concerned and REVERSED and SET-ASIDE as it pertains to defendant-
appellant Nuval. Defendant-appellant Nuval is hereby absolved of any civil liability and the
complaint against him is hereby DISMISSED."4
"Plaintiff Zacarias was taken out [of] the car by residents of the area and was brought to the
hospital by Eduard Tangan, a Narcom agent who happened to pass by the place. Plaintiff
Zacarias suffered multiple fracture on his left leg and other injuries in his body. Plaintiff Zacarias
underwent a leg operation and physical therapy to repair the damaged leg.

On the other hand, the trial court5 ruled in this wise: "Defendant Nuval offered P100,000.00 as compensation for the injuries caused. Plaintiffs
refused to accept the amount.
 17
"On this account, plaintiffs filed a criminal suit against defendant Darwin. Plaintiffs also filed this
present civil suit against defendants for damages.
"Plaintiffs alleged that the proximate cause of the accident is defendant’s Darwin recklessness in
driving defendant Nuval’s jeep; that on account of said recklessness of defendant Darwin,
plaintiff suffered damages; that defendant Darwin was an employee of defendant Nuval at the
time of accident; that defendant Nuval did not exercise due diligence in the supervision of his
employee; that defendants should he held liable for damages.
"Defendant Nuval on the other hand insisted that he cannot be held answerable for the acts of
defendant Darwin; that defendant Darwin was not an employee of defendant Nuval at the time of
the accident; that defendant Darwin was hired only as casual and has worked with defendant
Nuval’s company only for five days; that at the time of the accident, defendant Darwin was no
longer connected with defendant Nuval’s company; that defendant Darwin was not authorized to
drive the vehicle of defendant Nuval; that defendant Nuval tried to locate defendant Darwin but
the latter could no longer be found; that defendant Nuval cannot be held liable for damages.
"Defendant Darwin [h]as failed to file his answer within the reglementary period. Consequently,
he was declared in default. Trial of the case proceeded."6
Ruling of the Court of Appeals
The Court of Appeals explained that in order to hold an employer liable for the negligent acts of
an employee under Article 2180 of the Civil Code, it must be shown that the employee was
"acting within the scope of his assigned task when the tort complained of was committed." 7
The employer in this case, Respondent Mario Nuval, cannot be held liable for the tort committed
by Darwin. First, appellants did not present evidence showing that the driver was indeed an
employee of respondent at the time the accident occurred. And second, even
assuming arguendo that Darwin was in fact an employee of Nuval, it was not shown that the
former was acting within the scope of his assigned task when the incident happened. Thus, the
requisites for holding an employer liable for the tort committed by an employee were not
satisfied.
Hence, this appeal.8
Issues
Petitioners present the following issues:
"A. Whether or not Defendant Darwin was in fact an employee of Defendant Nuval;
"B. Whether or not Defendant Nuval was negligent in the selection and supervision of his
employees;
"C. Whether or not Defendant Nuval was grossly negligent in the safekeeping of the key to his
owner-type jeep and of said vehicle itself;
"D. Whether or not respondent must be held liable for the damages and injuries suffered by
appellees; [and]
"E. Whether or not findings of facts of the Court of Appeals are subject to exceptions." 9
For brevity, Item A will be taken up as the first issue; while B, C, D and E will be discussed
together as the second issue, since they all directly pertain to respondent’s vicarious liability.
The Court’s Ruling
The Petition is meritorious.
First Issue: No Proof That Employment Was Terminated
Respondent maintains that on the date10 the accident happened, Darwin was no longer his
employee because the latter’s services had already been terminated. Nuval adds that Darwin
was hired for a period of only four to six days. To substantiate this claim, the former presented
payroll and employment records showing that the latter was no longer his employee.
We disagree. The only proof proferred by Respondent Nuval to show that Darwin was no longer
his employee was the payroll in which the latter’s name was not included. However, as revealed
by the testimonies of the witnesses presented during trial, respondent had other employees
working for him who were not listed in the payroll either. The trial court explained as follows:
"It surfaced that the payroll and daily time records presented by defendant Nuval [were] not
reliable proofs of the names and number of employees that defendant Nuval had at the time of
the incident in view of the testimonies of witnesses for defendant Nuval tending to show that
there were more employees of defendant Nuval who were not in the payroll." 11
The rather easy access which Darwin had to the keys to the vehicle of Nuval further weakened
the latter’s cause. First, nobody questioned the fact that the former had freely entered
respondent’s house where the keys to the vehicle were kept. The theory of Nuval that Darwin
must have stolen the keys as well as the vehicle is rather farfetched and not supported by any
proof whatsoever. It is obviously an afterthought concocted to present some semblance of a
defense. Second, both respondent and his employees who testified did not act as if the vehicle
had been stolen. He had not reported the alleged theft of his vehicle. Neither did he search nor
ask his employees to search for the supposedly stolen vehicle. In fact, he testified that his
employees had told him that the keys and the vehicle had merely "probably" been stolen by
Darwin.
"Atty. Bobadilia: Did you ask among your employees who gave the key to Darwin?
Mario Nuval: I asked them, sir.
Atty. Bobadilla: What was the reply of your employees?
M. Nuval: According to my employees he stole the key of the jeepney at home.
 18
Atty. Abas: I disagree with the interpretation of the interpreter because the answer of the witness
is ‘ninanak yata."
Interpreter: I agree, your Honor.
Court: So, what is the correct interpretation?
A: According to my employees perhaps the key was stolen, or perhaps Darwin stole the key to
the jeep."12
From the totality of the evidence, we are convinced that Darwin was Nuval’s driver at the time of
the accident.
Second to Fourth Issues: Employer’s Liability
The CA agreed with the theory of respondent that he could not be held liable for the negligent
acts of his employee because Darwin was not acting within the scope of his assigned tasks
when the damage occurred. Respondent adds that he observed the diligence of a good father of
a family and was not negligent in safeguarding the keys to the said vehicle.
Article 2180 of the Civil Code provides that employers shall be liable for damages caused by
their employees acting within the scope of their assigned tasks. The said provision is reproduced
below:
"ART. 2180. The obligation imposed by article 2176 is demandable not only for one’s own acts
or omissions, but also for those of persons for whom one is responsible.
"The father and, in case of his death or incapacity, the mother, are responsible for the damages
caused by the minor children who live [in] their company.
"Guardians are liable for damages caused by the minors or incapacitated persons who are
under their authority and live in their company.
"The owners and managers of an establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the branches in which the latter are
employed or on the occasion of their functions.
"Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in any
business or industry.
"The State is responsible in like manner when it acts through a special agent; but not when the
damage has been caused by the official to whom the task done properly pertains, in which case
what is provided in article 2176 shall be applicable.
"Lastly, teachers or heads of establishments of arts and trades shall be liable for damages
caused by their pupils and students or apprentices, so long as they remain in their custody.
"The responsibility treated of in this article shall cease when the persons herein mentioned prove
that they observed all the diligence of a good father of a family to prevent damage." 13 (Italics
supplied)
The facts established in the case at bar show that Darwin was acting within the scope of the
authority given him when the collision occurred. That he had been hired only to bring
respondent’s children to and from school must be rejected. True, this may have been one of his
assigned tasks, but no convincing proof was presented showing that it was his only task. His
authority was to drive Nuval’s vehicle. Third parties are not bound by the allegation that the
driver was authorized to operate the jeep only when the employer’s children were on board the
vehicle. Giving credence to this outlandish theory would enable employers to escape their legal
liabilities with impunity. Such loophole is easy to concoct and is simply unacceptable.
The claim of respondent that he had exercised the diligence of a good father of a family is not
borne out by the evidence. Neither is it supported by logic. His main defense that at the time of
the accident Darwin was no longer his employee, having been merely hired for a few days, is
inconsistent with his other argument of due diligence in the selection of an employee.
Once a driver is proven negligent in causing damages, the law presumes the vehicle owner
equally negligent and imposes upon the latter the burden of proving proper selection of
employee as a defense.14 Respondent failed to show that he had satisfactorily discharged this
burden.
No Proof of Contributory Negligence
Respondent Nuval’s accusation that Petitioner Zacarias Carticiano is guilty of contributory
negligence by failing to stop his car or to evade the oncoming jeep is untenable. Both the trial
and the appellate courts found that the accident was caused by the fact that Darwin’s jeep
suddenly veered towards Zacarias’ lane when the vehicles were about to pass each other, thus
making it difficult if not impossible for petitioner to avoid the head-on collission. Nuval utterly
failed to present sufficient evidence to show that Zacarias could have evaded the
jeep.1âwphi1 Given the distance between the vehicles and the speed at which they were
travelling, the former was not able to demonstrate convincingly that the latter could have
minimized the damage complained of.
Review of Factual Findings
Generally, the factual findings of lower courts are accorded great respect by this Court.
However, the above rule is subject to certain exceptions, one of which is when the two lower
court’s findings oppose each other.15
In the present case, there is a clear conflict between the findings of the trial court and those of
the CA. Such conflict hinges on whether it was sufficiently proven that the employment of Darwin
had indeed been terminated by respondent, and whether the former was acting within the scope
of his assigned tasks at the time the collision occurred. The resolution of both of these pivotal
factual issues is determinative of respondent’s vicarious liability for the injuries caused by
Darwin. It is thus necessary for this Court to pore over the evidence adduced, as it did already.
Damages
 19

Article 2199 of the Civil Code allows the aggrieved party to recover the pecuniary loss that he "ART. 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other than
has suffered. judicial costs, cannot be recovered, except:

"ART. 2199. Except as provided by law or by stipulation, one is entitled to an adequate (1) When exemplary damages are awarded x x x."18
compensation only for such pecuniary loss suffered by him as he has duly proved. Such
compensation is referred to as actual or compensatory damages."
As held by the trial court, respondent’s refusal to answer adequately for the damages forced
petitioners to litigate and incur expenses. And to serve as an example for the public good,
Based on the above, Petitioner Zacarias is entitled to indemnification for actual damages caused exemplary damages are affirmed, since Petitioner Zacarias has already shown that he is entitled
by the negligence of Darwin, for which the latter’s employer, Respondent Nuval, is solidarily to compensatory and moral damages in accordance with Article 2234 of the Civil Code.
liable. And as found by the trial court, petitioner is entitled to ₱160,715.19 for his medical
treatment, as testified to by Dr. Eduardo Arandia. In the same vein, both petitioners are also
WHEREFORE, the Petition is hereby GRANTED. The assailed Decision
entitled to ₱173,788, which represents the costs incurred for the repair of the damaged vehicle. 16
is REVERSED and SET ASIDE and the trial court’s Decision REINSTATED, except that the
award of ₱100,000 for lost "income or opportunities" is DELETED.
The Civil Code allows indemnification for lost profit or income, 17 but petitioners failed to adduce
sufficient proof of such loss.
SO ORDERED.

However, moral damages are in order, based on Articles 2217 and 2219 of the Civil Code which
respectively provide:

"ART. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be recovered if they are the
proximate result of the defendant’s wrongful act or omission.

"ART. 2219. Moral damages may be recovered in the following and analogous cases:

xxx xxx xxx

"(2) Quasi-delicts causing physical injuries x x x"

As a direct result of the collision, petitioner suffered physically. It is also true that he experienced
and will continue to experience social humiliation and ridicule for having his left leg shorter than
the right which causes him to limp when walking. For the above, we agree with the trial court that
Petitioner Zacarias is entitled to an award of moral damages.

Exemplary damages and attorney’s fees are likewise authorized by the following provisions of
the Civil Code:

"ART. 2229. Exemplary or corrective damages are imposed, by way of example or correction for
the public good, in addition to the moral, temperate, liquidated or compensatory damages."

"ART. 2234. While the amount of the exemplary damages need not be proved, the plaintiff must
show that he is entitled to moral, temperate or compensatory damages before the court may
consider the question of whether or not exemplary damages should be awarded. In case
liquidated damages have been agreed upon, although no proof of loss is necessary in order that
such liquidated damages may be recovered, nevertheless, before the court may consider the
question of granting exemplary in addition to the liquidated damages, the plaintiff must show that
he would be entitled to moral, temperate or compensatory damages were it not for the stipulation
for liquidated damages."
 20
SECOND DIVISION
G.R. No. 158995 September 26, 2006
L.G. FOODS CORPORATION and VICTORINO GABOR, Vice-President and General
Manager, petitioners,
vs.
HON. PHILADELFA B. PAGAPONG-AGRAVIADOR, in her capacity as Presiding Judge of
Regional Trial Court, Branch 43, Bacolod City, and SPS. FLORENTINO and THERESA
VALLEJERA, respondents.
DECISION
GARCIA, J.:
Assailed and sought to be set aside in this petition for review on certiorari is the Decision1 dated
April 25, 2003 of the Court of Appeals (CA), as reiterated in its Resolution of July 10,
2003,2 in CA-G.R. SP No. 67600, affirming an earlier Order of the Regional Trial Court (RTC) of
Bacolod City, Branch 43, which denied the petitioners' motion to dismiss in Civil Case No. 99-
10845, an action for damages arising from a vehicular accident thereat instituted by the herein
private respondents - the spouses Florentino Vallejera and Theresa Vallejera - against the
petitioners.
The antecedent facts may be briefly stated as follows:
On February 26, 1996, Charles Vallereja, a 7-year old son of the spouses Florentino Vallejera
and Theresa Vallejera, was hit by a Ford Fiera van owned by the petitioners and driven at the
time by their employee, Vincent Norman Yeneza y Ferrer. Charles died as a result of the
accident.
In time, an Information for Reckless Imprudence Resulting to Homicide was filed against the
driver before the Municipal Trial Court in Cities (MTCC), Bacolod City, docketed as Criminal
Case No. 67787, entitled People of the Philippines v. Vincent Norman Yeneza.
Unfortunately, before the trial could be concluded, the accused driver committed suicide,
evidently bothered by conscience and remorse. On account thereof, the MTCC, in its order of
September 30, 1998, dismissed the criminal case.
On June 23, 1999, in the RTC of Bacolod City, the spouses Vallejera filed a complaint 3 for
damages against the petitioners as employers of the deceased driver, basically alleging that as
such employers, they failed to exercise due diligence in the selection and supervision of their
employees. Thereat docketed as Civil Case No. 99-10845, the complaint was raffled to Branch
43 of the court.
In their Answer with Compulsory Counterclaim,4 the petitioners as defendants denied liability for
the death of the Vallejeras' 7-year old son, claiming that they had exercised the required due
diligence in the selection and supervision of their employees, including the deceased driver.
They thus prayed in their Answer for the dismissal of the complaint for lack of cause of action on
the part of the Vallejera couple.
During pre-trial, the defendant petitioners insisted that their dismissal prayer be resolved. Hence,
the trial court required them to file within ten days a memorandum of authorities supportive of
their position.
Instead, however, of the required memorandum of authorities, the defendant petitioners filed
a Motion to Dismiss, principally arguing that the complaint is basically a "claim for subsidiary
liability against an employer" under the provision of Article 1035 of the Revised Penal Code.
Prescinding therefrom, they contend that there must first be a judgment of conviction against
their driver as a condition sine qua non to hold them liable. Ergo, since the driver died during the
pendency of the criminal action, the sine qua non condition for their subsidiary liability was not
fulfilled, hence the of lack of cause of action on the part of the plaintiffs. They further argue that
since the plaintiffs did not make a reservation to institute a separate action for damages when
the criminal case was filed, the damage suit in question is thereby deemed instituted with the
criminal action. which was already dismissed.
In an Order dated September 4, 2001,6 the trial court denied the motion to dismiss for lack of
merit and set the case for pre-trial. With their motion for reconsideration having been denied by
the same court in its subsequent order7 of September 26, 2001, the petitioners then went
on certiorari to the CA in CA-G.R. SP No. 67600, imputing grave abuse of discretion on the part
of the trial judge in refusing to dismiss the basic complaint for damages in Civil Case No. 99-
10845.
In the herein assailed decision8 dated April 25, 2003, the CA denied the petition and upheld the
trial court. Partly says the CA in its challenged issuance:
xxx xxx xxx
It is clear that the complaint neither represents nor implies that the responsibility
charged was the petitioner's subsidiary liability under Art. 103, Revised Penal Code.
As pointed out [by the trial court] in the Order of September 4, 2001,
the complaint does not even allege the basic elements for such a liability, like the
conviction of the accused employee and his insolvency. Truly enough, a civil action to
enforce subsidiary liability separate and distinct from the criminal action is even
unnecessary.
xxx xxx xxx
Specifically, Civil Case No. 99-10845 exacts responsibility for fault or negligence
under Art. 2176, Civil Code, which is entirely separate and distinct from the civil
liability arising from negligence under the Revised Penal Code. Verily, therefore, the
liability under Art. 2180, Civil Code, is direct and immediate, and not conditioned upon
prior recourse against the negligent employee or prior showing of the latter's
insolvency. (Underscoring in the original.)
In time, the petitioners moved for a reconsideration but their motion was denied by the CA in its
resolution9 of July 10, 2003. Hence, the petitioners' present recourse on their submission that
the appellate court committed reversible error in upholding the trial court's denial of their motion
to dismiss.
We DENY.
 21
As the Court sees it, the sole issue for resolution is whether the spouses Vallejeras' cause of
action in Civil Case No. 99-10845 is founded on Article 103 of the Revised Penal Code, as
maintained by the petitioners, or derived from Article 218010 of the Civil Code, as ruled by the
two courts below.
It thus behooves us to examine the allegations of the complaint for damages in Civil Case No.
99-10845. That complaint alleged, inter alia, as follows:
xxx xxx xxx
3. That defendant [LG Food Corporation] is the registered owner of a Ford Fiera Van
with Plate No. NMS 881 and employer sometime February of 1996 of one Vincent
Norman Yeneza y Ferrer, a salesman of said corporation;
4. That sometime February 26, 1996 at around 2:00 P.M. at Rosario St., Bacolod City,
the minor son of said plaintiffs [now respondents], Charles Vallejera, 7 years old, was
hit and bumped by above-described vehicle then driven by said employee, Vincent
Norman Yeneza y Ferrer;
5. That the mishap was due to the gross fault and negligence of defendant's
employee, who drove said vehicle, recklessly, negligently and at a high speed without
regard to traffic condition and safety of other road users and likewise to the fault and
negligence of the owner employer, herein defendants LG Food Corporation who failed
to exercise due diligence in the selection and supervision of his employee, Vincent
Norman Yeneza y Ferrer;
6. That as a result of said incident, plaintiffs' son suffered multiple body injuries which
led to his untimely demise on that very day;
7. That a criminal case was filed against the defendant's employee, docketed as
Criminal Case No. 67787, (earlier filed as Crim. Case No. 96-17570 before RTC)
before MTC-Branch III, entitled "People v. Yeneza" for "Reckless Imprudence resulting
to Homicide," but the same was dismissed because pending litigation, then remorse-
stricken [accused] committed suicide;
xxx xxx xxx
8. That the injuries and complications as well as the resultant death suffered by the
late minor Charles Vallejera were due to the negligence and imprudence of
defendant's employee;
9. That defendant LG Foods Corporation is civilly liable for the
negligence/imprudence of its employee since it failed to exercise the necessary
diligence required of a good father of the family in the selection and supervision
of his employee, Vincent Norman Yeneza y Ferrer which diligence if exercised,
would have prevented said incident. (Bracketed words and emphasis ours.)
Nothing in the foregoing allegations suggests, even remotely, that the herein petitioners are
being made to account for their subsidiary liability under Article 103 of the Revised Penal Code.
As correctly pointed out by the trial court in its order of September 4, 2001 denying the
petitioners' Motion to Dismiss, the complaint did not even aver the basic elements for the
subsidiary liability of an employer under Article 103 of the Revised Penal Code, such as the prior
conviction of the driver in the criminal case filed against him nor his insolvency.
Admittedly, the complaint did not explicitly state that plaintiff Vallejeras were suing the defendant
petitioners for damages based on quasi-delict. Clear it is, however, from the allegations of the
complaint that quasi-delict was their choice of remedy against the petitioners. To stress, the
plaintiff spouses alleged in their complaint gross fault and negligence on the part of the driver
and the failure of the petitioners, as employers, to exercise due diligence in the selection and
supervision of their employees. The spouses further alleged that the petitioners are civilly liable
for the negligence/imprudence of their driver since they failed to exercise the necessary
diligence required of a good father of the family in the selection and supervision of their
employees, which diligence, if exercised, could have prevented the vehicular accident that
resulted to the death of their 7-year old son.
Section 2, Rule 2, of the 1997 Rules of Civil Procedure defines cause of action as the "act or
omission by which a party violates the right of another." Such act or omission gives rise to an
obligation which may come from law, contracts, quasi contracts, delicts or quasi-delicts.11
Corollarily, an act or omission causing damage to another may give rise to two separate civil
liabilities on the part of the offender, i.e., 1) civil liability ex delicto;12 and 2) independent civil
liabilities, such as those (a) not arising from an act or omission complained of as felony (e.g.,
culpa contractual or obligations arising from law;13 the intentional torts;14 and culpa aquiliana15);
or (b) where the injured party is granted a right to file an action independent and distinct from the
criminal action.16 Either of these two possible liabilities may be enforced against the offender. 17
Stated otherwise, victims of negligence or their heirs have a choice between an action to enforce
the civil liability arising from culpa criminal under Article 100 of the Revised Penal Code, and an
action for quasi-delict (culpa aquiliana) under Articles 2176 to 2194 of the Civil Code. If, as here,
the action chosen is for quasi-delict, the plaintiff may hold the employer liable for the negligent
act of its employee, subject to the employer's defense of exercise of the diligence of a good
father of the family. On the other hand, if the action chosen is for culpa criminal, the plaintiff can
hold the employer subsidiarily liable only upon proof of prior conviction of its employee. 18
Article 116119 of the Civil Code provides that civil obligation arising from criminal offenses shall
be governed by penal laws subject to the provision of Article 217720 and of the pertinent
provision of Chapter 2, Preliminary Title on Human Relation, and of Title XVIII of this Book,
regulating damages. Plainly, Article 2177 provides for the alternative remedies the plaintiff may
choose from in case the obligation has the possibility of arising indirectly from the delict/crime or
directly from quasi-delict/tort. The choice is with the plaintiff who makes known his cause of
action in his initiatory pleading or complaint,21 and not with the defendant who can not ask for the
dismissal of the plaintiff's cause of action or lack of it based on the defendant's perception that
the plaintiff should have opted to file a claim under Article 103 of the Revised Penal Code.
Under Article 2180 of the Civil Code, the liability of the employer is direct or immediate. It is not
conditioned upon prior recourse against the negligent employee and a prior showing of
insolvency of such employee.22
Here, the complaint sufficiently alleged that the death of the couple's minor son was caused by
the negligent act of the petitioners' driver; and that the petitioners themselves were civilly liable
for the negligence of their driver for failing "to exercise the necessary diligence required of a
 22

good father of the family in the selection and supervision of [their] employee, the driver, which SO ORDERED.
diligence, if exercised, would have prevented said accident."

Had the respondent spouses elected to sue the petitioners based on Article 103 of the Revised
Penal Code, they would have alleged that the guilt of the driver had been proven beyond
reasonable doubt; that such accused driver is insolvent; that it is the subsidiary liability of the
defendant petitioners as employers to pay for the damage done by their employee (driver) based
on the principle that every person criminally liable is also civilly liable. 23 Since there was no
conviction in the criminal case against the driver, precisely because death intervened prior to the
termination of the criminal proceedings, the spouses' recourse was, therefore, to sue the
petitioners for their direct and primary liability based on quasi-delict.

Besides, it is worthy to note that the petitioners, in their Answer with Compulsory Counter-
Claim,24 repeatedly made mention of Article 2180 of the Civil Code and anchored their defense
on their allegation that "they had exercised due diligence in the selection and supervision of
[their] employees." The Court views this defense as an admission that indeed the petitioners
acknowledged the private respondents' cause of action as one for quasi-delict under Article
2180 of the Civil Code.

All told, Civil Case No. 99-10845 is a negligence suit brought under Article 2176 - Civil Code to
recover damages primarily from the petitioners as employers responsible for their negligent
driver pursuant to Article 2180 of the Civil Code. The obligation imposed by Article 2176 is
demandable not only for one's own acts or omissions, but also for those of persons for whom
one is responsible. Thus, the employer is liable for damages caused by his employees and
household helpers acting within the scope of their assigned tasks, even though the former is not
engaged in any business or industry.

Citing Maniago v. CA,25 petitioner would argue that Civil Case No. 99-10845 should have been
dismissed for failure of the respondent spouses to make a reservation to institute a separate civil
action for damages when the criminal case against the driver was filed.

The argument is specious.

To start with, the petitioners' reliance on Maniago is obviously misplaced. There, the civil case
was filed while the criminal case against the employee was still pending. Here, the criminal case
against the employee driver was prematurely terminated due to his death. Precisely, Civil Case
No. 99-10845 was filed by the respondent spouses because no remedy can be obtained by
them against the petitioners with the dismissal of the criminal case against their driver during the
pendency thereof.

The circumstance that no reservation to institute a separate civil action for damages was made
when the criminal case was filed is of no moment for the simple reason that the criminal case
was dismissed without any pronouncement having been made therein. In reality, therefor, it is as
if there was no criminal case to speak of in the first place. And for the petitioners to insist for the
conviction of their driver as a condition sine qua non to hold them liable for damages is to ask for
the impossible.

IN VIEW WHEREOF, the instant petition is DENIED for lack of merit.

Costs against the petitioners.

 23
G.R. No. 205090, October 17, 2016
GREENSTAR EXPRESS, INC. AND FRUTO L. SAYSON, JR., Petitioners, v. UNIVERSAL
ROBINA CORPORATION AND NISSIN UNIVERSAL ROBINA CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside; a) the September 26, 2012
Decision2 of the Court of Appeals (CA) in CA-G.R. CV No, 96961 affirming the April 4, 2011
Decision3 of the Regional Trial Court (RTC) of San Pedro, Laguna, Branch 31 in Civil Case No.
SPL-0969; and b) the CA's December 28, 2012 Resolution4 denying herein petitioners' Motion
for Reconsideration.5chanrobleslaw
Factual Antecedents
Petitioner Greenstar Express, Inc. (Grepistar) is a domestic corporation engaged in the business
of public transportation, while petitioner Fruto L. Sayson, Jr. (Sayson) is one of its bus drivers,
Respondents Universal Robina Corporation (URC) and Nissin Universal Robina Corporation
(NURC) are domestic corporations engaged in the food business. NURC is a subsidiary of URC.
URC is the registered owner of a Mitsubishi L-300 van with plate number WRN 403 (URC
van).6chanrobleslaw
At about 6:50 a.m. on February 25, 2003, which was then a declared national
holiday,7 petitioner's bus, which was then being driven toward the direction of Manila by Sayson,
collided head-on with the URC van, which was then being driven Quezon province-bound by
NURC's Operations Manager, Renante Bicomong (Bicomong). The incident occurred along Km.
76, Maharlika Highway, Brgy. San Agustin, Alaminos, Laguna. Bicomong died on the spot, while
the colliding vehicles sustained considerable damage.
On September 23, 2003, petitioners filed a Complaint8 against NURC to recover damages
sustained during the collision, premised on negligence. The case was docketed as Civil Case
No. SPL-0969 and assigned to Branch 31 of the RTC of San Pedro, Laguna, An Amended
Complaint9 was later filed, wherein URC was impleaded as additional defendant.
URC and NURC filed their respective Answers,10 where they particularly alleged and claimed
lack of negligence on their part and on the part of Bicomong.
After the issues were joined, trial proceeded. During trial, only Sayson was presented by
petitioners as eyewitness to the collision.
Riding of the Regional Trial Court
On April 4, 2011, the RTC issued its Decision, which decreed thus:
chanRoblesvirtualLawlibrary
11
During the trial on the merits, plaintiffs presented five witnesses namely Josephine Gadiaza,
Miguel Galvan, SPO3 Ernesto Marfori, Fruto Sayson and Lilia Morales.
xxxx
Plaintiff Fruto Sayson testified that on that fateful day, he was driving the plaintiff passenger bus
from Lucena City going to Manila at a speed of more or less 60 kilometers per hour when he met
a vehicular accident at Barangay San Agustin, Alaminos, Laguna. He saw from afar an L-300
UV coming from the shoulder going on the opposite direction to Lucena City. Said vehicle was
already near his bus when it (UV) managed to return to ifs proper lane, then hit and swerved his
vehicle.- "He tried to prevent the collision by swerving to the right but it was too late. As a result,
the left front portion of the bus was damaged while the front portion of the L-300 UV was totally
wrecked- He and his conductor, one.Mendoza, managed to get but of the bug by forcibly
opening the automatic door which was also damaged due to the impact After getting out of the
bus, he looked for the driver of the L300 UV but he was informed by a bystander that he was
thrown in a canal arid already dead. For fear of possible reprisals from bystanders as
experienced by most drivers involved in an accident, he boarded smother bug owned by bis
employer. Before he left, he indorsed the matter to hip conductor and line inspector. Thereafter,
he reported to their office at San Pedro, Laguna. He executed a statement on the same day x x
x and submitted the same to their operations department. He likewise testified that before the
incident, he was earning P700.00 to P900,00 a day on commission basis and he drives 25 days
in a month. However, after the incident, he was not able to drive for almost two months.
On cross-examination, it was established that the incident happened along the Maharlika
Highway along Kilometer 72. There were no structures near the site of the incident, The highway
ha§ two lanes which can accommodate the size of the bus about 3 meters wide and a. light
vehicle. He was bound for Manila and had about ten passengers. He saw the L-300 UV on the
shoulder of the opposite lane about 250 meters away from, his bus while he was driving [at] a
speed of 60 kilometers per hour. He did not sense any danger when he saw the vehicle from
afar. He cannot drive fast as there were five vehicles ahead of his bus. When the L-300 UV
managed to return to it? proper lane coming from the shoulder, it was heading directly towards
his direction, at a distance of more or less five, meters away from his bus, He noticed that the L-
300 UV was running at full speed as he saw dust clouds. "The point of impact happened on his
lane. He tried to swerve his bus to prevent the impact but lie admitted that at his speed, it was
difficult for him to maneuver his vehicle
Investigator SPO3 Ernesto Marfori of the Alaminos Police Station testified that at about 7:00 in
the morning, he received a report from the Barangay Chairman of a vehicular accident that
occurred at Brgy. §an Agustin, Alaminos, Laguna. He proceeded to the site with SPO2 Rolando
Alias. Upon arrival at the scene of the accident, he attended to the victim, but found him dead
inside the L- 300 UV. He came to know later that he was Renante Bicomong. He immediately
called up his office and requested that funeral services for the dead man. be arranged.
Thereafter, he photographed the damaged vehicles (Exhibits "F" and sub-markings) and
interviewed some witnesses. He made a sketch depicting the damages suffered by both vehicles
(Exhibit "D-2"), the L-300 IV at the front portion (Exhibit "D-4") while the bus at the left side of its
front portion (Exhibit "D-3"). Based on the sketch he prepared, the impact happened almost at
the right lane which was the bus lane (Exhibit "D-6"). He likewise noticed some debris also found
at the bus lane. He was able to interview the bus conductor and a fruit store owner in [sic] the
names of Apolinar Devilla and Virgilio Adao, He did not see the driver of the bus at the scene of
the accident and he was told that he had left the place. Based on, his investigation, the possible
cause of the accident was the swerving to the left lane [by] the driver of the L-300 UV which
resulted in me encroaching of the bus' lane. He reduced bis findings into writing in a Report
dated February 28, 2003 (Exhibits "D" and sub-markings).
On cross-examination, the witness admitted that he was not present when the vehicles collided.
The entries he made in the blotter report were mainly based on the accounts of the witnesses he
was able to interview who however did not give their written statements. When he arrived at the
scene of the accident, the L-300 UV was already on the shoulder of the road and it was totally
 24
wrecked. According to reports, the van spun around when it was bit causing the metal scar
found on the road.
On the other hand, the defendants12 presented three witnesses: its employees Alexander
Caoleng and John Legaspi and deceased Renante Bicomong's widow, Gloria Bicomgng, These
witnesses were presented to prove that deceased Bicomong was acting in his personal capacity
when the mishap happened on February 25, 2003 as that day had been declared an official
holiday and the L-300 UV he was driving had not been issued to him, among others.
Alexander Caoleng, HR. Manager of defendant NURC, testified that deceased Bicomong
worked as the Operations Manager of defendant NURC until his death as evidenced by a
Certificate of Employment dated December 9, 2008 (Exhibit "I"), His last assignment was in First
Cavite Industrial Estate (FCEB). He died in a vehicular accident in Alaminos, Laguna on
February 25, 2003 which was declared a holiday by virtue of Proclamation No. 331 (Exhibit "2").
Despite having been issued his own service vehicle (Exhibits "3", "4" and "5"), he used the L-300
UV which was not officially issued to him but in the name of Florante Soro-Soro, defendant
NURC's Logistics Manager at that time (Exhibits "7" and "B"). The said vehicle was used mainly
to transport items coming from their office at Pasig to Cavite and vice versa (Exhibit "9").
John Legaspi, Project Manager of defendant NURC, testified that he was first assigned in its
Cavite Plant in 1999 with deceased Bicomaog as his immediate supervisor being the Production
Manager then. He last saw him in the afternoon of February 24, 2003 at about 6:00 pm when
they had a short chat He (Bicomong) was then transferring his things from his executive vehicle
which was a Toyota Corolla to the L-300 UY which was a company vehicle. He (Bicomong)
shared that he would go home to Quezon Province the following day (February 25) to give
money to his daughter. He knew that his trip to Quezon was not work-related as February 25,
2003 was declared a holiday. Besides, there exists no plant owned by defendant NURC in the
provinces of Quezon, Laguna or Bicol as attested to by the General Manager of defendant
NURC in a Certification to that effect (Exhibit "11").
On cross-examination, he distinguished the use of an executive vehicle assigned to an executive
officer for his personal use and the company vehicle which was supposed to be for official use
only.
Finally, Gloria Bicomong, widow of deceased Reynante Bicomong testified that she knew that
her husband was going home to Calendaria (sic), Quezon on February 25, 2003 because he
informed their daughter. He was on his way home when he met a vehicular-accident in
Alaminos. Laguna which claimed his life. She was informed about the accident involving her
husband by a high school friend who was also traveling to Quezon at that time, She filed a
criminal complaint at Alaminos, Laguna but it was dismissed for reasons unknown to her. She
likewise filed a civil complaint for damages before the Regional Trial Court of Lucena City
docketed as Civil Case No. 2.103-135.
On cross-examination, she narrated that aside from the Toyota Corolla service of her husband,
he would use the L-300 UV whenever he had to bring bulky things home. As far as she can
recall, he used the L-300 UV about 5 times.
After an evaluation of the foregoing testimonies and documentary evidence of the parties, the
court had [sic] arrived at the following findings and conclusions:
chanRoblesvirtualLawlibraryPlaintiff has no cause of action and cannot recover from the
defendants even assuming that the direct and proximate cause of the accident was the
negligence of the defendant's employee Renato Bicomong.
Pursuant to Article 2184 of the New Civil Code, the owner of a motor vehicle is solidarily liable
with his driver if at the time of the mishap, the owner was in the vehicle and by the use of due
diligence could have presented (sic) the misfortune; if the owner is not in the motor vehicle, the
provision of Article 2180 is applicable. The defendants being juridical persons, the first
paragraph of Article 2184 is obviously not applicable.
Under Article 2180, "employers shall be liable tor the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though the former are
not engaged in any business or industry. "In other words, for the employer to be liable for the
damages caused by his employee, the latter must have caused the damage in the course of
doing his assigned tasks or in the-performance of his duties" (Yambao vs. Zuñiga, G.R. No:
146173, December 11, 2003)
In this case, it is beyond cavil that the deceased Renante Bicong [sic] was not in the
performance of his duty on that fateful day of February 25, 2003. In the first place that day was a
holiday; there was no work and it was not shown that he was working as indeed his work
assignment is operations manager of the company's plant m, Cavite while the accident
happened while he was in Alaminos, Laguna on his way home to Candelaria, Quezon.
Secondly, as an operations manager, he was issued an executive car for. Ms own use, a Toyota
Corolla vehicle and he merely preferred to use the L-300 UV when going home to his family in
Quezon. Even assuming that the company allowed or tolerated this, by itself, the tolerance did
not make, the employer liable in the absence of showing that he was using the vehicle in the
performance of a duty or within the scope of his assigned tasks. But as clearly relayed by
defendant's witnesses, defendants have no business or plant in Quezen. The L-300 vehicle was
for the hauling of items between their Pasig and Cavite offices and was merely borrowed by
Bicomong in going to Candelaria, Quezon on that day.
The accident having occurred outside Remnte Bicomong's assigned tasks, defendant employers
cannot be held liable to the plaintiffs, even assuming that it is the fault of defendants' employee
that was the direct and proximate cause of their damages.
However, the question of whose fault or negligence was the direct and proximate cause of the
mishap is material to the resolution of defendants' counterclaim.
The rule is that the burden of proof lies on him who claims a fact (Federico Ledesina vs. NLRC,
G.R. No. 175585, October 19,2007). Therefore, to be able to recover in their counterclaim, the
defendants must prove by preponderance of evidence that the direct and proximate cause of
their losses was the fault of the plaintiff-driver.
Defendants were not able to present any witness as to how the mishap occurred Their witnesses
were limited to proving that Renante Bicomong was not in the performance of his assigned task
when the incident happened.
A reading of their answer would reveal, that their attribution of fault to the plaintiff-driver is based
only on the point of impact of the two vehicles. Thus:
chanRoblesvirtualLawlibrary
'4.3 Based on the damage sustained by the passenger bus, plaintiffs' claim that Renante
Bicomong swerved on the left lane and encroached on the path of the said bus moments before
the accident could not have been true. Such claim would have resulted to a head-on collision
between the vehicle driven by Mr. Bicomong and the bus; the latter would have sustained
damage on its front side. However, based on Annexes "B" and "C" of the Complaint, the. said
bus sustained damage on its left side. Clearly, it was the passenger bus that swerved on the left
lane, which was being traversed by Renante Bicomong, and while returning to the right lane,
said bus hit the vehicle being driven by Mr. Bicomong. Thus, explaining the damage sustained
by the said bus on its left side just below the driver's seat.'
 25
The foregoing however is a mere interpretation or speculation and not supported by any
account, either by an eyewitness [or by] a explanation tracing the relative positions of the two
vehicles in relation to the road at the time of impact and the movements of the two vehicles after
the impact. For this reason, it will be unfair to make an interpretation of the events based alone
on the point of impact [on] the vehicles. The points of impact by themselves cannot explain the
positions of the vehicles on the road.
Defendants Memorandum attributed the cause of the mishap to the excessive speed of the bus.
In their Memorandum, the defendants content [sic] that if the driver had seen the L-3G0 UV
meters away in front of him running along the shoulder and negotiating back to its lane, the bus
driver would have watched out and slackened his speed. Considering the damage to both the
vehicles and the fact that the L-300,UV span [sic] and w,as thrown 40 feet away from the point of
impact and its driver was thrown 14 feet away from his vehicle, defendant argued that the bus
could not be running at 60 kilometers only. But assuming the bus indeed was running at high
speed that alone does not mean that the negligence of the driver was the direct and proximate
cause, If it is true that the L-300 UV ran from the right shoulder, climbed up to the right lane but
overshoot [sic] it and occupied the bus' lane, the speed of the bus cannot be considered the
proximate and direct cause of the collision; But as stated earlier, this were [sic] merely
conjectures and surmises of the defendants and not proven by competent evidence.
All told, defendants were not able to prove by their own evidence that the direct and proximate
cause of the collision was the fault of plaintiffs driver. Hence, they cannot hold plaintiffs liable for
the logs of their L-300 UV. As both parties failed to prove by their respective evidence where the
fault that occasioned their losses lie, they must bear their respective losses.
Anent defendants' counterclaim for attorney's fees and exemplary damages, there is no
evidence to show that the filing, of this suit was motivated [by] malice. It cannot be denied that
plaintiffs suffered damages. The court mainly, dismissed the complaint for lack of cause of action
as Renante Bicomong was not performing his assigned tasks at the time of the incident.
Besides, to hold them liable to defendants for attorney's fees and exemplary damages simply
because they failed to come up with sufficient evidence will be tantamount to putting a price on
one's right to sue.
WHEREFORE, judgment is hereby rendered dismissing the complaint as well as the
counterclaim.
No costs.
SO ORDERED.13
Ruling of the Court of Appeals
Petitioners filed an appeal before the CA, docketed as CA-G.R. CV No. 96961. They argued that
Bicomong's negligence was the proximate cause of the collision, as the van he was 4rjvmg
swerved to the opposite lane and hit the bus which was then traveling along its proper lane; that
Bicomong's act of occupying the bus's lane was illegal and thus constituted a traffic violation;
that respondents are liable for damages as the registered owner of the van and failing to
exercise due diligence in the selection and supervision of its employee, Bicomong,
Respondents, countered that the bus driven by Sayson was running at high speed when the,
collision occurred, thus indicating that Sayson was in violation of traffic rules; and that Say-son
had the last clear chance to avert collision but he failed to take the necessary precaution under
the circumstances, by reducing his speed and applying the brakes on time to avoid collision.
On September 26, 2012, the CA rendered the assailed Decision containing the following
pronouncement:
chanRoblesvirtualLawlibrary
The present case involving an action for damages based on quasi-delict is governed by Articles
2176 and 2180 of the New Civil Code, pertinent provisions of which read:
chanRoblesvirtualLawlibrary
'ART. 2176, Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.
ART. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or
omission also for those of persons for whom one is responsible.
xxx xxx xxx
Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks even though the former are not engaged in any
business or industry.'
Under Article 2180 of the New Civil Code, employers shall be held primarily and solidarily liable
for damages caused by their employees acting within the scope of their assigned tasks. To hold
the employer liable under this provision, it must be shown that an employer-employee
relationship exists, and that the employee was acting within the scope of his assigned task when
the act complained of was committed.
Records bear that the vehicular collision occurred on February 25, 2003 which was declared by
former Executive Secretary Alberto G. Romulo, by order of former President Gloria Macapagal-
Arroyo, as a special national holiday, per Proclamation No. 331 dated February 19, 2003.
Renante Bicomong had no work on that day and at the time the accident occurred, he was on
his way home to Candelaria, Quezon. There was no showing that on that day, Renante
Bicomong was given by defendants-appellees14 an assigned task, much less instructed to go to
Quezon. As testified to by Renante Bicomong's widow Gloria Bicomong, Renante Bicomong was
on the road that day because he was going home to Candelaria, Quezon. Thus, he was then
carrying out a personal purpose and not performing work for defendants-appellees.
Apropos is Castilex Industrial Corp. vs. Vicente Vasquez, Jr.,15 wherein the Supreme Court held
that the mere fact that an employee was using a service vehicle at the time of the injurious
incident is not of itself sufficient to charge his employer with liability for the operation of said
vehicle unless it appeared that he was operating the vehicle within the course or scope of bis
employment. Thus:ChanRoblesVirtualawlibrary
xxxx
'The court a quo and the Court of Appeals were one in holding that the driving by a messenger
of a company-issued vehicle is within the scope of his assigned tasks regardless of the time and
circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the
injurious incident is not of itself sufficient to charge petitioner with liability for the negligent
operation of said vehicle unless it appears mat he was operating the vehicle within the course or
scope of his employment.
The following are principles in American Jurisprudence on the employer's liability for the injuries
inflicted by the negligence of an employee in the use of an employer's motor vehicle.
xxxx
 26
III. Use of Employer's Vehicle Outside Regular Working Hours
An employer who loans his motor vehicle to an employee for the latter's personal use outside of
regular working hours is generally not liable for the employees negligent operation of the vehicle
during the period of permissive use, even where the employer contemplates that a regularly
assigned motor vehicle will be used by the employee for personal as well as business purposes
and there is some incidental benefit to the employer. Even where the employee's personal
purpose in using the vehicle has been accomplished and he has started the return trip to his
house where the vehicle is normally kept, it has been held that he has not resumed his
employment, and the employer is not liable for the employees negligent operation of the vehicle
during the return trip.
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on the
doctrine of respondent superior, not on the principle of bonus pater familias as in ours. Whether
the fault or negligence of the employee is conclusive on his employer as in American law or
jurisprudence, or merely gives rise to the presumption juris tantum of negligence on the part of
the employer as in ours, it is indispensable that the employee was acting in his employer's
business or within the scope of his assigned task.
In the case at bar, it is undisputed that ABAD did some overtime work at Hie petitioner's office,
which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's Restaurant in
Fuente Osmefia, Cebu City, which is about seven kilometers away from petitioner's place of
business. A witness for the private respondents, a sidewalk vendor, testified that Fuente
Osmeña is a lively place even at dawn because Goldie's Restaurant and Back Street were still
open and people were drinking thereat Moreover, prostitutes, pimps, and drug addicts littered
the place.
xxx xxx xxx
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a
personal purpose not in line with his duties at the time he figured in a vehicular accident. It was
then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours. ABAD's working
day had ended; his overtime work had already been completed. His being at a place which, as
petitioner put it, was known as a haven for prostitutes, pimps, and drug pushers and addicts, had
no connection to petitioner's business; neither had it any relation to his duties as a manager.
Rather, using his service vehicle even for personal purposes was a form of a fringe benefit or
one of the perks attached to his position.
Since there is paucity of evidence that ABAD was acting within the scope of the functions
entrusted to him, petitioner CASTILEX had no duty to show that it exercised the diligence of a
good father of a family in providing ABAD with a service vehicle. Thus, justice and equity require
that petitioner be relieved of vicarious liability for the consequences of the negligence of ABAD in
driving its vehicle.
Accordingly, in the absence of showing that Renante Bicomong was acting within the scope of
his assigned task at the time of the vehicular collision, defendants-appellees had no duty to
show that they exercised the diligence of a good father of a family in providing Renante
Bicomong with a service vehicle. Thus, the trial court did not err in holding that:
chanRoblesvirtualLawlibrary
'Under Article 2180, 'employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though the former are
not engaged in any business or industry. 'In other words, for the employer to be liable for the
damages caused by his employee, the latter must have caused the damage in the course of
doing his assigned tasks or. in the performance of his duties.' (Yambao vs. Zuñiga, G.R. No.
146173, December 11, 2003.)
In this case, it is.beyond cavil that the deceased Renante Bicong [sic] was not in the
performance of his duty on that fateful day of February 25, 2003. In the first place that day was a
holiday; there was no work and it was not shown that he was working as indeed his work
assignment [was as] operations manager of the company's plant in Cavite while the accident
happened while he was in Alaminos, Laguna on his way home to Candelaria, Quezon.
Secondly, as an operations manager, he was issued an executive car for his own use, a Toyota
Corolla vehicle and. he merely preferred to use the L-300 UV when going home to his family in
Quezon. Even assuming that the company allowed or tolerated this, by itself, the tolerance did
not make the employer liable in the absence of showing that he was using the vehicle in the
performance of a duty or within the scope of his assigned tasks. But as clearly relayed by
defendant's witnesses, defendants have no business or plant in Quezon. The L-300 vehicle was
for the hauling of items between their Pasig and Cavite offices and was merely borrowed by
Bicomong in going to Candelaria, Quezon on that day.
The accident having occurred outside Renante Bicomong's assigned tasks, defendant
employers cannot be held liable to the plaintiffs, even assuming that it is the fault of defendants'
employee that was the direct and proximate cause of their damages.'
In sum, squarely applicable in this case is the well-entrenched doctrine that the assessment of
the trial judge as to the issue of credibility binds the appellate court because he is in a better
position to decide the issue, having heard the witnesses and observed their deportment and
manner of testifying during the trial, except when the trial court has plainly overlooked certain
facts of substance and value, that, if considered, might affect the result of the case, or where the
assessment is clearly shown to be arbitrary. Plaintiffs-appellants have not shown this case to fall
under the exception.
WHEREFORE, the trial court's Decision dated April 4, 2011 is affirmed.
SO ORDERED.16chanroblesvirtuallawlibrary
Petitioners filed a Motion for Reconsideration, which the CA denied in its subsequent December
28, 2012 Resolution. Hence, the present Petition.
Issues
In a July 14, 2014 Resolution,17 this Court resolved to give due course to the Petition, which
contains the following assignment of errors:
chanRoblesvirtualLawlibrary
I.
THE HONORABLE COURT OF APPEALS ERRED IN ISSUING THE ASSAILED DECISION
AND RESOLUTION THAT RESPONDENTS ARE NOT LIABLE TO PETITIONERS FOR THE
DAMAGES THEY SUSTAINED CONSIDERING THAT THE ACCIDENT WAS ATTRIBUTED TO
THE NEGLIGENCE OF RENANTE BICOMONG.
II.
THE HONORABLE COURT OF APPEALS ERRED IN ADMITTING DEFENSES NOT PLEADED
IN THE MOTION TO DISMISS OR IN RESPONDENTS' ANSWER.18chanroblesvirtuallawlibrary
Petitioners' Arguments
Petitioners insist that respondents should be held liable for Bicomong's negligence under
 27
Articles 2176, 2180, and 2185 of the Civil Code;19 that Bicomong's negligence was the direct and
proximate eause of the accident, in that he unduly occupied the opposite lane which the bus was
lawfully traversing, thus resulting in the collision with Greenstar's bus; that Bicomong's driving on
the opposite lane constituted a traffic violation, therefore giving rise to the presumption of
negligence on his part; that in view of this presumption, it became incumbent upon respondents
to rebut the same by proving that they exercised care and diligence in the selection and
supervision of their employees; that in their respective answers and motion to dismiss,
respondents did not allege the defense, which they tackled only during trial, that since February
25, 2003 was a declared national holiday, then Bicomong was not acting within the scope of his
assigned tasks at the time of the collision; that for failure to plead this defense or allegation in
their respective answers and pleadings, it is deemed waived pursuant to Section 1, Rule 9 of the
1997 Rules of Civil Procedure20 (1997 Rules); that just the same, respondents failed to prove
that Bicomong was not in the official performance of his duties or that the URC van was not
officially issued to him at the time of the accident - and for this reason, the presumption of
negligence was not overturned; and that URC should be held liable as the registered owner of
the van.
In their Reply,21 petitioners add that while some of the issues raised in the Petition are factual in
nature, this Court must review the case as the CA gravely erred in its appreciation of the
evidence and in concluding that respondents are not liable. Finally, they argue that URC should
be held liable for allowing "a non-employee to use for his personal use the vehicle owned" by it.
Respondents' Arguments
Pleading affirmance, respondents argue in their Comment22 that the issues raised in the Petition
are factual in nature; that the collision occurred on a holiday and while Bicomong was. using the
URC van for a purely personal purpose, it should be. sufficient to absolve respondents of liability
as evidently, Bicomong was not performing his official duties on that day; that the totality of the
evidence indicates that it was Sayson who was negligent in the operation of Greenstar's bus
when the collision occurred; that Bicomong was not negligent in driving the URC van; that
petitioners' objection - pertaining to their defense that the collision occurred on a holiday, when
Bicomong was not considered to be at work - was belatedly raised; and that in any case, under
Section 5, Rule 10 of the 1997 Rules,23 their pleadings should be deemed amended to conform
to the evidence presented at the trial, which includes proof that the accident occurred on a
holiday and while Bicomong was not in the performance of his official tasks and instead going
home to his family in Quezon province.
Our Ruling
The Court denies the Petition.
In Caravan Travel and Tours International, Inc. v. Abejar,24 the Court made the following relevant
pronouncement:
chanRoblesvirtualLawlibrary
The resolution of this case must consider two (2) rules. First, Article 2180's specification
that '[e]mployers shall be liable for the damages caused by their employees ... acting
within the scope of their assigned tasks [.]' Second, the operation of the registered-owner
rule that registered owners are liable for death or injuries caused by the operation of their
Vehicles.
These rules appear to be in conflict when it comes to cases in which the employer is also the
registered owner of a vehicle. Article 2180 requires proof of two things: first, an employment
relationship between the driver and the owner; and second, that the driver acted within the
scope of his or her assigned tasks. On the other hand, applying the registered-owner rule only
requires the plaintiff to prove that the defendant-employer is the registered owner of the vehicle.
The registered-owner rule was articulated as early as 1957 in Erezo, et al. v.
Jepte,25cralawredwhere this court explained that the registration of motor vehicles, as required
by Section 5(a) of Republic Act No. 41365 the and Transportation and Traffic Code, was
necessary 'not to make said registration the operative act by which ownership in vehicles is
transferred, ... but to permit the use and operation of the vehicle upon any public highway[.]' Its
'main aim ... is to identify the owner so that if any accident happens, or that any damage or injury
is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite
individual, the registered owner.'
xxxx
Aguilar, Sr. v. Commercial Savings Bank26 recognized the seeming conflict between Article 2180
and the registered-owner rule and applied the latter.
xxxx
Preference for the registered-owner rule became more pronounced in Del Carmen, Jr. v.
Bacoy:27chanrobleslaw
xxxx
Filcar Transport Services v. Espinas28 stated that the registered owner of a vehicle can no longer
use the defenses found in Article 2180:
chanRoblesvirtualLawlibraryx x x x
Mendoza v. Spouses Gomez29 reiterated this doctrine.
However, Aguilar, Sr., Del Carmen, Filcar, and Mendoza should not be taken to mean that
Article 2180 of the Civil Code should be completely discarded in cases where the registered-
owner rule finds application.
As acknowledged in Filcar, there is no categorical statutory pronouncement in the Land
Transportation and Traffic Code stipulating the liability of a registered owner. The source of a
registered owner's liability is not a distinct statutory provision, but remains to be Articles 2176
and 2180 of the Civil Code:
chanRoblesvirtualLawlibrary
While Republic Act No. 4136 or the Land Transportation and Traffic Code does not contain any
provision on the liability of registered owners in case of motor vehicle mishaps, Article 2176, in
relation with Article 2180, of the Civil Code imposes an obligation upon Filcar, as registered
owner, to answer for the damages caused to Espinas' car.
Thus, it is imperative to apply the registered-owner rule in a manner that harmonizes it with
Articles 2176 and 2180 of the Civil Code. Rules must be construed in a manner that will
harmonize them with other rules so as to form a uniform and consistent system of jurisprudence.
In light of this, the words used in Del Carmen are particularly notable. There, this court stated
that Article 2180 'should defer to' the registered-owner rule. It never stated that Article 2180
should be totally abandoned.
Therefore, the appropriate approach is that in cases where both the registered-owner rule
and Article 2180 apply, the plaintiff must first establish that the employer is the registered
owner of the vehicle in question. Once the plaintiff successfully proves ownership, there
arises a disputable presumption that the requirements of Article 2180 have been proven.
 28
As a consequence, the burden of proof shifts to the defendant to show that no liability
under Article 2180 has arisen.
This disputable presumption, insofar as the registered owner of the vehicle in relation to the
actual driver is concerned, recognizes that between the owner and the victim, it is the former that
should carry the costs of moving forward with the evidence. The victim is, in many cases, a
hapless pedestrian or motorist with hardly any means to uncover the employment relationship of
the owner and the driver, or any act that the owner may have done in relation to that
employment.
The registration of the vehicle, on the other hand, is accessible to the public.
Here, respondent presented a copy of the Certificate of Registration of the van that hit Reyes.
The Certificate attests to petitioner's ownership of the van. Petitioner itself did not dispute its
ownership of the van. Consistent with the rule we have just stated, a presumption that the
requirements of Article 2180 have been satisfied arises. It is now up to petitioner to establish that
it incurred no liability under Article 2180. This it can do by presenting proof of any of the
following: first, that it had no employment relationship with Bautista; second, that
Bautista acted outside the scope of his assigned tasks; or third, that it exercised the
diligence of a good father of a family in the selection and supervision of
Bautista. (Emphasis supplied)
In the present case, it has been established that on the day of the collision -or on February 25,
2003 - URC was the registered owner of the URC van, although it appears that it was
designated for use by NURC, as it was officially assigned to the latter's Logistics Manager,
Florante Soro-Soro (Soro-Soro); that Bicomong was the Operations Manager of NURC and
assigned to the First Cavite Industrial Estate; that there was no work as the day was declared a
national holiday; that Bicomong was on his way home to his family in Quezon province; that the
URC van was not assigned to Bicompng as well, but solely for Soro-Soro's official use; that the
company service vehicle officially assigned to Bicomong was a Toyota Corolla, which he left at
the Cavite plant and instead, he used the URC van; and that other than the Cavite plant, there is
no other NURC plant in the provinces of Quezon, Laguna or Bicol.
Applying the above pronouncement in the Caravan Travel and Tours case, it must be said that
when by evidence the ownership of the van and Bicomong's employment were proved, the
presumption of negligence on respondents' part attached, as the registered owner of the van.
and as Bicomong's employer. Hie burden of proof then shifted to respondents to show that no
liability under Article 2180 arose. This may be done by proof of any of the following:
chanRoblesvirtualLawlibrary
1. That they had no employment relationship with Bicomong; or
2. That Bicomong acted outside the scope of his assigned tasks; or
3. That they exercised the diligence of a good father of a family in the selection and supervision
of Bicomong.
In denying liability, respondents claimed in their respective answers the defense of absence of
negligence on their part. During trial, they presented evidence to the effect that on the day of the
collision, which was a declared national non-working holiday, Bicomong was not perforating Ms
work, but was on his way home to Quezon on a personal undertaking, that is, to give money to
his daughter and spend the holiday with his family; and that the vehicle he was driving was not
an NURC vehicle, nor was it assigned to him, but was registered to URC and assigned to its
Logistics Manager, Soro-Soro, Petitioners object to this, claiming that this defense was not
alleged in the respondents' respective answers. The Court disagrees, The failure to allege these
facts in the answers does not preclude, respondents from proving them during trial; these facts
are precisely illustrative of their defense of absence of negligence. Just the same, petitioners'
failure to object to the respondents' presentation of such evidence below is tantamount to a
waiver; Section 5, Rule 10 of the 1997 Rules - on amendments to conform to or authorize
presentation of evidence - will have to apply, but the failure to amend the pleadings does not
affect the result of the trial of these issues.
The failure of a party to amend a pleading to conform to the evidence adduced during trial does
not preclude an adjudication by the court on the basis of such evidence which may embody new
issues not raised in the pleadings, or serve as a basis for a higher award of damages. Although
the pleading may not have been amended to conform to the evidence submitted during trial,
judgment may nonetheless be rendered, not simply on the basis of the issues alleged but also
on the basis of issues discussed and the assertions of fact proved in the course of trial. The
court may treat the pleading as if it had been amended to conform to the evidence, although it
had not been actually so amended, x x x30
Respondents succeeded in overcoming the presumption of negligence, having shown that when
the collision took place, Bicomong was not in the performance of his work; that he was in
possession of a service vehicle that did not belong to his employer NURC, but to URC, and
which vehicle was not officially assigned to him, but to another employee; that his use of the
URC van was unauthorized - even if he had used the same vehicle in furtherance of a personal
undertaking in the past,31 this does not amount to implied permission; that the accident occurred
on a holiday and while Bicomong was on his way home to his family in Quezon province; and
that Bicomong had no official business whatsoever in his hometown in Quezon, or in Laguna
where the collision occurred, his area of operations being limited to the Cavite area.
On the other hand, the evidence suggests that the collision could have been avoided if Sayson
exercised care and prudence, given the circumstances and information that he had immediately
prior to the accident. From the trial court's findings and evidence on record, it would appear that
immediately prior to the collision, which took place very early in the morning - or at around 6:50
a.m., Sayson saw that the URC van was traveling fast Quezon-bound on the shoulder of the
opposite lane about 250 meters away from him; that at this point, Sayson was driving the
Greenstar bus Manila-bound at 60 kilometers per hour; that Sayson knew that the URC van was
traveling fast as it was creating dust clouds from traversing the shoulder of the opposite lane;
that Sayson saw the URC van get back into its proper lane but directly toward him; that despite
being apprised of the foregoing information, Sayson, instead of slowing down, maintained his
speed and tried to swerve the Greenstar bus, but found it difficult to do so at his speed; that the
collision or point of impact occurred right in the middle of the road; 32 and that Sayson absconded
from the scene immediately after the collision.
From the foregoing facts, one might think that from the way he was driving immediately before
the collision took place, Bicomong could have fallen asleep or ill at the wheel, which led him to
gradually steer the URC van toward the shoulder of the highway; and to get back to the road
after realizing his mistake, Bicomong must have overreacted, thus overcompensating or
oversteering to the left, or toward the opposite lane and right into Sayson's bus. Given the
premise of dozing off or falling ill, this explanation is not far-fetched. The collision occurred very
early in the morning in Alaminos, Laguna. Sayson himself testified that he found Bicomong
driving on the service road or shoulder of the highway 250 meters away, which must have been
unpaved, as it caused dust clouds to rise on the heels of the URC van. And these dust clouds
stole Sayson's attention, leading him to conclude that the van was running at high speed. At any
rate, the evidence places the point of impact very near the middle of the road or just within
Sayson's lane. In other words, the collision took place with Bicomong barely encroaching on
Sayson's lane. This means that prior to and at the time of collision, Sayson did not take any
defensive maneuver to prevent the accident and minimize the impending damage to life and
property, which resulted in the collision in the middle of the highway, where a vehicle would
 29

normally be traversing. If Sayson took defensive measures, the point of impact should have additional finding that Sayson was negligent under the circumstances. But their Petition, "once
occurred further inside his lane or not at the front of the bus - but at its side, which should have accepted by this Court, throws the entire case open to review, and xxx this Court has the
shown that Sayson either slowed down or swerved to the right to avoid a collision. authority to review matters not specifically raised or assigned as error by the parties, if their
consideration is necessary in arriving at a just resolution of the case."35chanrobleslaw
Despite having seen Bicomong drive the URC van in a precarious manner while the same was
still a good 250 meters away from his bus, Sayson did not take the necessary precautions, as by WHEREFORE, the Petition is DENIED. The September 26, 2012 Decision and December 28,
reducing speed and adopting a defensive stance to avert any untoward incident that may occur 2012 Resolution of the Court of Appeals in CA-G.R. CV No. 96961 are AFFIRMED in toto.
from Bicomong's manner of driving. This is precisely his testimony during trial. When the van
began to swerve toward his bus, he did not reduce speed nor swerve his bus to avoid collision. SO ORDERED.ch
Instead, he maintained his current speed and course, and for this reason., the inevitable took
place: An experienced driver who is. presented with the same facts would have adopted an
attitude consistent with a desire to preserve life and property; for common carriers, the diligence
demanded is of the highest degree.

The law exacts from common carriers (i.e., those persons, corporations, firms, or associations
engaged in the business of carrying or transporting passengers or goods or both, by land, water,
or air, for compensation, offering their services to the public) the highest degree of diligence (i.e.,
extraordinary diligence) in ensuring the safety of its passengers. Articles 1733 and 1755 of the
Civil Code state:ChanRoblesVirtualawlibrary
Art. 1733. Common carriers, from the nature of their business and for reasons of public policy,
are bound to observe extraordinary, diligence in the vigilance over the goods and for the safety
of the passengers transported by them, according to all the circumstances of each case.

Art. 1755. A common carrier is bound to carry the passengers safely as far as human care arid
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for
all the circumstances.
In this relation, Article 1756 of the Civil Code provides that '[i]n case of death of or injuries to
passengers, common carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and
1755. xxx'33chanroblesvirtuallawlibrary

However, Sayson took no defensive maneuver whatsoever in spite of the fact that he saw
Bicomong drive his van in a precarious manner, as far as 250 meters away - or at a point in time
and space where Sayson had all the opportunity to prepare and avert a possible collision. The
collision was certainly foreseen and avoidable but Sayson took no measures to avoid it. Rather
than exhibit concern for the welfare of his passengers and the driver of the oncoming vehicle,
who might have fallen asleep or suddenly fallen ill at the wheel, Sayson coldly and uncaringly
stood his ground^ closed his eyes, and left everything to fate, without due regard for the
consequences. Such a suicidal mindset cannot be tolerated, for the grave danger it poses to the
public and passengers availing of petitioners' services. To add insult to injury, Sayson hastily
fled the scene of the collision instead of rendering assistance to the victims - thus exhibiting a
selfish, cold-blooded attitude and utter lack of concern motivated by the self-centered desire to
escape liability, inconvenience, and possible detention by the authorities, rather than secure the
well-being of the victims of his own negligent act.

x x x The doctrine of last clear chance provides that where both parties are negligent but the
negligent act of one is appreciably later in point of time than that of the other, or where it is
impossible to determine whose fault or negligence brought about the occurrence of the incident,
the one who had the last clear opportunity to avoid the impending harm but failed to do so, is
chargeable with the consequences arising therefrom. Stated differently, the rule is that the
antecedent negligence of a person does not preclude recovery of damages caused by the
supervening negligence of the latter, who had the last fair chance to prevent the impending harm
by the exercise of due diligence, x x x34

Petitioners might object to the treatment of their case in the foregoing manner, what with the
 30

anRoblesvirtualLawlibrary )Respondents succeeded in overcoming the presumption of negligence, having shown that
GREENSTAR EXPRESS, INC. AND FRUTO L. SAYSON, JR. when the collision tookplace, Bicomong was not in the performance of his work; that he was in
, possession of a service vehicle that did notbelong to his employer NURC, but to URC, and
Petitioners which vehicle was not officially assigned to him, but to anotheremployee; that his use of the
, URC van was unauthorized - even if he had used the same vehicle in furtherance of apersonal
v. undertaking in the past,
31
UNIVERSAL ROBINA CORPORATION ANDNISSIN UNIVERSAL ROBINA CORPORATION this does not amount to implied permission; that the accident occurred on aholiday and while
, Bicomong was on his way home to his family in Quezon province; and that Bicomong had
Respondent noofficial business whatsoever in his hometown in Quezon, or in Laguna where the collision
.
occurred, his area ofoperations being limited to the Cavite area.However, Sayson took no
FACTS:
At about 6:50 a.m. on February 25, 2003, which was then a declared national holiday, defensive maneuver whatsoever in spite of the fact that he saw Bicomong drive his van ina
7 precarious manner, as far as 250 meters away - or at a point in time and space where Sayson
petitioner's bus, whichwas then being driven toward the direction of Manila by Sayson, collided had all theopportunity to prepare and avert a possible collision. The collision was certainly
head-on with the URC van, which was thenbeing driven Quezon province-bound by NURC's foreseen and avoidable but Saysontook no measures to avoid it. Rather than exhibit concern for
Operations Manager, Renante Bicomong (Bicomong). Bicomongdied on the spot, while the the welfare of his passengers and the driver of the oncoming vehicle, who might have fallen
colliding vehicles sustained considerable damage.On September 23, 2003, petitioners filed a asleep or suddenly fallen ill at the wheel, Sayson coldly and uncaringlystood his ground^ closed
Complaint
his eyes, and left everything to fate, without due regard for the consequences. Such asuicidal
8
against NURC to recover damages sustained during thecollision, premised on negligence. The mindset cannot be tolerated, for the grave danger it poses to the public and passengers availing
case was docketed as Civil Case No. SPL-0969 and assigned to Branch 31 of theRTC of San ofpetitioners' services.x x x The doctrine of last clear chance provides that where both parties
Pedro, Laguna, An Amended Complaint are negligent but the negligent act of one isappreciably later in point of time than that of the
9 other, or where it is impossible to determine whose fault ornegligence brought about the
was later filed, wherein URC was impleaded as additionaldefendant.URC and NURC filed their occurrence of the incident, the one who had the last clear opportunity to avoid theimpending
respective Answers, harm but failed to do so, is chargeable with the consequences arising therefrom.
10
where they particularly alleged and claimed lack of negligence ontheir part and on the part of
Bicomong.The RTC issued its Decision dismissing the complaint as well as the WHEREFORE, the Petition is
counterclaim. Petitioners filed an appeal beforethe CA. The CA affirmed the trial court's DENIED
Decision.Petitioners filed a Motion for Reconsideration, which the CA denied in its subsequent
December 28, 2012 Resolution.Hence, the present Petition.
Issue:
1. Whether or not THE HONORABLE COURT OF APPEALS ERRED IN ISSUING THE
ASSAILED DECISION ANDRESOLUTION THAT RESPONDENTS ARE NOT LIABLE TO
PETITIONERS.
HELD:
The Court denies the Petition.
The resolution of this case must consider two (2) rules. First, Article 2180's specification that '[e]mployers shall
beliable for the damages caused by their employees ... acting within the scope of their assigned tasks [.]'
Second, theoperation of the registered-owner rule that registered owners are liable for death or injuries caused
by theoperation of their Vehicles.

Therefore, the appropriate approach is that in cases where both the registered-owner rule and Article 2180
apply,the plaintiff must first establish that the employer is the registered owner of the vehicle in question. Once
theplaintiff successfully proves ownership, there arises a disputable presumption that the requirements of
Article2180 have been proven. As a consequence, the burden of proof shifts to the defendant to show that no
liabilityunder Article 2180 has arisen.

This it can do by presenting proof of any of the following: first, that it had no employment relationship
withBautista; second, that Bautista acted outside the scope of his assigned tasks; or third, that it exercised
thediligence of a good father of a family in the selection and supervision of Bautista.
(
Emphasis supplied
 31

HIRD DIVISION (17) On December 19, 2000, at about 2:00 o'clock in the morning, in gross violation of
all applicable laws, rules and regulations, defendants Capocyan, et al., willfully,
unlawfully and feloniously picketed, barricaded and otherwise obstructed entry and
G.R. No. 155990 September 12, 2007
exit to and from the main gate of plaintiff Universal's plant; x x x

UNIVERSAL AQUARIUS, INC. and CONCHITA TAN, petitioners,

(23) In a parallel move, and a companion activity to their unlawful obstruction of
vs.
plaintiff Universal's premises, Capocyan, et al., likewise picketed , obstructed and
Q.C. HUMAN RESOURCES MANAGEMENT CORPORATION, respondent *.
otherwise barricaded the premises of plaintiff Marman, whose depot adjoined that of
plaintiff Universal; x x x
DECISION
(26) As a consequence of the companion blockade on plaintiff Marman's premises, its
AUSTRIA-MARTINEZ, J.: business operations were paralyzed;

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court (27) Plaintiff Universal's and plaintiff Marman's operations continue to be at a
assailing the Decision1dated August 23, 2002 of the Court of Appeals (CA) in CA-G.R. SP No. standstill, causing damages in the form of unearned sales x x x
65570 and the CA Resolution2 dated October 22, 2002 which denied petitioners' Motion for
Reconsideration.
(31) Defendant Resources represented itself to be able to provide temporary workers
who are competent to assist in plaintiff Universal's plant operations; it held itself out as
The facts: a manpower firm with a pool of what can generally be described as law-abiding
workers, as that is essential in its business of job-contracting;
Universal Aquarius, Inc. (Universal) is engaged in the manufacture and distribution of chemical
products in Metro Manila. It operates a chemical plant in Antipolo City. Conchita Tan (Tan), as a (32) Defendant Resources instead sent a band of scoundrels who allowed themselves
proprietor under the name and style of Marman Trading (Marman), is engaged in the trading, to be misdirected and misguided by Capocyan, an attorney (?), and "national
delivery and distribution of chemical products in Metro Manila, with a depot in Antipolo City president" of Obrero Pilipino (?)
adjoining Universal's chemical plant.
x x x5
Q.C. Human Resources Management Corporation (Resources) is engaged in supplying
manpower to various establishments. It supplied Universal with about seventy-four (74)
On January 3, 2001, Universal forged an Agreement (To End Labor Dispute)
temporary workers to assist Universal in the operation of its chemical plant in Antipolo City.
with Obrero Pilipino.6 Thus, the strike which affected the business operations of Universal and
Marman ended. Universal and Tan then filed a Notice of Dismissal as against the strikers. 7
On December 13, 2000, Rodolfo Capocyan (Capocyan), claiming to be the general
counsel/national president of the labor organization called Obrero Pilipino (Universal Aquarius
On January 8, 2001, Resources filed a Motion to Dismiss on the grounds that the complaint
Chapter), hereinafter referred to as Obrero Filipino, sent a Notice of Strike to Universal.
stated no cause of action against it; that, assuming the existence of such cause of action, the
same was lost upon dismissal of the case against the individual defendants; and lack of
On the same date, Resources informed the Regional Office of the Department of Labor and jurisdiction.8
Employment that the officers and members of Obrero Pilipino are its employees and not
employees of Universal.
In an Order dated February 2, 2001, the RTC denied the Motion to Dismiss. 9 Resources filed a
Motion for Reconsideration10 but it was denied by the RTC in its Order dated May 11, 2001.11
Five days later, or on December 19, 2000, Capocyon and 36 other union officers and
members3 of Obrero Pilipino, picketed, barricaded and obstructed the entry and exit of
On July 11, 2001, Resources filed a petition for certiorari and prohibition with the CA.12 On
Universal's Antipolo City chemical plant and intercepted Universal's delivery trucks thereby
August 23, 2002, the CA rendered a Decision which set aside the Orders dated February 2,
disrupting its business operations. Marman's depot, which adjoined Universal's plant, suffered a
2001 and May 11, 2001 of the RTC and dismissed the complaint for lack of cause of
similar fate.
action.13 The CA held that:

On December 27, 2000, Universal and Tan filed a Complaint against the strikers and Resources
It was very clear from the allegations in the complaint that the claims of plaintiffs
before the Regional Trial Court, Branch 74, Antipolo City (RTC) for breach of contract and
(private respondents in this case) stemmed from the strike, which resulted in the
damages suffered due to the disruption of their respective business operations, docketed as
disruption of their business operations. From the four corners of the complaint, it was
Civil Case No. 00-6029.4 The Complaint alleges, in part:
apparent that the right of the plaintiffs to operate their business was violated when the
defendants, Rodolfo Capocyan and company, staged the strike in the premises of
Universal Aquarius and Marman, thereby disrupting the plant's operations. Q.C.
 32
Human Resources Management Corporation (the petitioner in this case) was made
defendant in the complaint only because it was the employer of the strikers. However,
subsequent events erased the cause of action of plaintiffs, that is, when Universal
Aquarius agreed to end the dispute by giving financial assistance to the striking
workers and the dismissal of the case against them. With this turn of events, the trial
court had no more issue to resolve, and the dismissal of the complaint against the
strikers necessarily warranted the dismissal of the complaint against Q.C. Human
Resources Management Corporation because plaintiffs had no more cause of action
against it.14
Universal and Tan filed a Motion for Reconsideration15 but it was denied by the CA in its
Resolution dated October 22, 2002.16
The present petition is anchored on the following grounds:
The Honorable Court of Appeals seriously erred in dismissing Civil Case No. 00-6829
for lack of cause of action.
The Honorable Court of Appeals seriously erred in holding that the lower court
committed grave abuse of discretion tantamount to lack of jurisdiction when he denied
the motion to dismiss filed by respondent Resources.17
Universal and Tan aver that the complaint stated a cause of action against Resources that would
warrant cognizance by the RTC; the allegations of the complaint clearly point out that Universal
is suing Resources for the latter's failure to supply the former with temporary workers who will
help in its business.
On the other hand, Resources contends that the complaint stated no cause of action against it
since there is nothing in the allegations thereof that it participated in the acts committed by its
employees.
The petition is partly impressed with merit.
Section 1(g) Rule 1618 of the 1997 Rules of Civil Procedure makes it clear that failure to make a
sufficient allegation of a cause of action in the complaint warrants the dismissal thereof. Section
2, Rule 2 of the 1997 Rules of Civil Procedure defines a cause of action as the act or omission
by which a party violates the right of another. It is the delict or the wrongful act or omission
committed by the defendant in violation of the primary right of the plaintiff.19 Its essential
elements are as follows:
1. A right in favor of the plaintiff by whatever means and under whatever law it arises
or is created;
2. An obligation on the part of the named defendant to respect or not to violate such
right; and
3. Act or omission on the part of such defendant in violation of the right of the plaintiff
or constituting a breach of the obligation of the defendant to the plaintiff for which the
latter may maintain an action for recovery of damages or other appropriate relief.20
It is only upon the occurrence of the last element that a cause of action arises, giving the plaintiff
the right to maintain an action in court for recovery of damages or other appropriate relief. 21
In Hongkong and Shanghai Banking Corporation Limited v. Catalan,22 this Court held:
The elementary test for failure to state a cause of action is whether the complaint
alleges facts which if true would justify the relief demanded. Stated otherwise, may the
court render a valid judgment upon the facts alleged therein? The inquiry is into the
sufficiency, not the veracity of the material allegations. If the allegations in the
complaint furnish sufficient basis on which it can be maintained, it should not be
dismissed regardless of the defense that may be presented by the defendants. 23
Verily, it is beside the point whether or not the allegations in the complaint are true, for with a
motion to dismiss complaint based on lack of cause of action, the movant only hypothetically
admits the truth of the facts alleged in the complaint; that is, assuming arguendo that the facts
alleged are true, those allegations are insufficient for the court to render a valid judgment upon
the same in accordance with the prayer of the complaint. 24
The complaint does not have to establish or allege facts proving the existence of a cause of
action at the outset; this will have to be done at the trial on the merits of the case. 25 To sustain a
motion to dismiss for lack of cause of action, the complaint must show that the claim for relief
does not exist, rather than that a claim has been defectively stated, or is ambiguous, indefinite or
uncertain.26
Anent Universal's claim for breach for contract and damages, the Court is convinced that the
Complaint sufficiently states a cause of action against Resources. The Complaint alleged that
Universal had a contract of employment of temporary workers with Resources; and that
Resources violated said contract by supplying it with unfit, maladjusted individuals who staged a
strike and disrupted its business operations. Given these hypothetically admitted facts, the RTC,
in the exercise of its original and exclusive jurisdiction,27 could have rendered judgment over the
dispute.
However, with regard to Tan's claim for damages, the Court finds that she has no cause of
action against Resources. A thorough reading of the allegations of the Complaint reveals that
Tan's claim for damages clearly springs from the strike effected by the employees of Resources.
It is settled that an employer's liability for acts of its employees attaches only when the tortious
conduct of the employee relates to, or is in the course of, his employment. 28 The question then is
whether, at the time of the damage or injury, the employee is engaged in the affairs or concerns
of the employer or, independently, in that of his own. An employer incurs no liability when an
employee’s conduct, act or omission is beyond the range of employment.29 Unquestionably,
when Resources' employees staged a strike, they were acting on their own, beyond the range of
their employment. Thus, Resources cannot be held liable for damages caused by the strike
staged by its employees.
WHEREFORE, the petition is PARTLY GRANTED. The Decision dated August 23, 2002 and
Resolution dated October 22, 2002 of the Court of Appeals in CA-G.R. SP No. 65570
are REVERSED and SET ASIDE insofar only as the dismissal of the complaint in Civil Case No.
00-6029 for lack of cause of action of Universal Aquarius, Inc. against Q.C. Human Resources
Management Corporation is concerned. The complaint against the latter is REINSTATED. The
Regional Trial Court, Branch 74, Antipolo City is DIRECTED to continue with the proceedings on
the cause of action of Universal Aquarius, Inc. against Q.C. Human Resources Management
Corporation.
 33

The dismissal of the complaint in Civil Case No. 00-6029 for lack of cause of action of Conchita was first denied by the trial court. It was only upon motion for reconsideration of the defendants
Tan against Q.C. Human Resources Management Corporation is AFFIRMED. of such denial, reiterating the above grounds that the following order was issued:

SO ORDERED. Considering the motion for reconsideration filed by the defendants on

January 14, 1965 and after thoroughly examining the arguments therein
contained, the Court finds the same to be meritorious and well-founded.

WHEREFORE, the Order of this Court on December 8, 1964 is hereby

. SECOND DIVISION
reconsidered by ordering the dismissal of the above entitled case.

G.R. No. L-24803 May 26, 1977

SO ORDERED.

PEDRO ELCANO and PATRICIA ELCANO, in their capacity as Ascendants of Agapito

Quezon City, Philippines, January 29, 1965. (p. 40, Record [p. 21, Record
Elcano, deceased, plaintiffs-appellants,
on Appeal.)
vs.
REGINALD HILL, minor, and MARVIN HILL, as father and Natural Guardian of said
minor, defendants-appellees. Hence, this appeal where plaintiffs-appellants, the spouses Elcano, are presenting for Our
resolution the following assignment of errors:
Cruz & Avecilla for appellants.
THE LOWER COURT ERRED IN DISMISSING THE CASE BY
UPHOLDING THE CLAIM OF DEFENDANTS THAT -
Marvin R. Hill & Associates for appellees.

THE PRESENT ACTION IS NOT ONLY AGAINST BUT ALSO A

BARREDO, J.:
VIOLATION OF SECTION 1, RULE 107, NOW RULE 111, OF THE
REVISED RULES OF COURT, AND THAT SECTION 3(c) OF RULE 111,
Appeal from the order of the Court of First Instance of Quezon City dated January 29, 1965 in RULES OF COURT IS APPLICABLE;
Civil Case No. Q-8102, Pedro Elcano et al. vs. Reginald Hill et al. dismissing, upon motion to
dismiss of defendants, the complaint of plaintiffs for recovery of damages from defendant
II
Reginald Hill, a minor, married at the time of the occurrence, and his father, the defendant
Marvin Hill, with whom he was living and getting subsistence, for the killing by Reginald of the
son of the plaintiffs, named Agapito Elcano, of which, when criminally prosecuted, the said THE ACTION IS BARRED BY A PRIOR JUDGMENT WHICH IS NOW
accused was acquitted on the ground that his act was not criminal, because of "lack of intent to FINAL OR RES-ADJUDICTA;
kill, coupled with mistake."
III
Actually, the motion to dismiss based on the following grounds:
THE PRINCIPLES OF QUASI-DELICTS, ARTICLES 2176 TO 2194 OF
1. The present action is not only against but a violation of section 1, Rule THE CIVIL CODE, ARE INAPPLICABLE IN THE INSTANT CASE; and
107, which is now Rule III, of the Revised Rules of Court;
IV
2. The action is barred by a prior judgment which is now final and or in res-
adjudicata;
THAT THE COMPLAINT STATES NO CAUSE OF ACTION AGAINST
DEFENDANT MARVIN HILL BECAUSE HE WAS RELIEVED AS
3. The complaint had no cause of action against defendant Marvin Hill, GUARDIAN OF THE OTHER DEFENDANT THROUGH EMANCIPATION
because he was relieved as guardian of the other defendant through BY MARRIAGE. (page 4, Record.)
emancipation by marriage.
It appears that for the killing of the son, Agapito, of plaintiffs-appellants, defendant- appellee
(P. 23, Record [p. 4, Record on Appeal.]) Reginald Hill was prosecuted criminally in Criminal Case No. 5102 of the Court of First Instance
 34
of Quezon City. After due trial, he was acquitted on the ground that his act was not criminal
because of "lack of intent to kill, coupled with mistake." Parenthetically, none of the parties has
favored Us with a copy of the decision of acquittal, presumably because appellants do not
dispute that such indeed was the basis stated in the court's decision. And so, when appellants
filed their complaint against appellees Reginald and his father, Atty. Marvin Hill, on account of
the death of their son, the appellees filed the motion to dismiss above-referred to.
As We view the foregoing background of this case, the two decisive issues presented for Our
resolution are:
1. Is the present civil action for damages barred by the acquittal of Reginald in the criminal case
wherein the action for civil liability, was not reversed?
2. May Article 2180 (2nd and last paragraphs) of the Civil Code he applied against Atty. Hill,
notwithstanding the undisputed fact that at the time of the occurrence complained of. Reginald,
though a minor, living with and getting subsistenee from his father, was already legally married?
The first issue presents no more problem than the need for a reiteration and further clarification
of the dual character, criminal and civil, of fault or negligence as a source of obligation which
was firmly established in this jurisdiction in Barredo vs. Garcia, 73 Phil. 607. In that case, this
Court postulated, on the basis of a scholarly dissertation by Justice Bocobo on the nature
of culpa aquiliana in relation to culpa criminal or delito and mere culpa or fault, with pertinent
citation of decisions of the Supreme Court of Spain, the works of recognized civilians, and earlier
jurisprudence of our own, that the same given act can result in civil liability not only under the
Penal Code but also under the Civil Code. Thus, the opinion holds:
The, above case is pertinent because it shows that the same act machinist.
come under both the Penal Code and the Civil Code. In that case, the action
of the agent killeth unjustified and fraudulent and therefore could have been
the subject of a criminal action. And yet, it was held to be also a proper
subject of a civil action under article 1902 of the Civil Code. It is also to be
noted that it was the employer and not the employee who was being sued.
(pp. 615-616, 73 Phil.). 1
It will be noticed that the defendant in the above case could have been
prosecuted in a criminal case because his negligence causing the death of
the child was punishable by the Penal Code. Here is therefore a clear
instance of the same act of negligence being a proper subject matter either
of a criminal action with its consequent civil liability arising from a crime or of
an entirely separate and independent civil action for fault or negligence
under article 1902 of the Civil Code. Thus, in this jurisdiction, the separate
individuality of a cuasi-delito or culpa aquiliana, under the Civil Code has
been fully and clearly recognized, even with regard to a negligent act for
which the wrongdoer could have been prosecuted and convicted in a
criminal case and for which, after such a conviction, he could have been
sued for this civil liability arising from his crime. (p. 617, 73 Phil.) 2
It is most significant that in the case just cited, this Court specifically applied
article 1902 of the Civil Code. It is thus that although J. V. House could have
been criminally prosecuted for reckless or simple negligence and not only
punished but also made civilly liable because of his criminal negligence,
nevertheless this Court awarded damages in an independent civil action for
fault or negligence under article 1902 of the Civil Code. (p. 618, 73 Phil.) 3
The legal provisions, authors, and cases already invoked should ordinarily
be sufficient to dispose of this case. But inasmuch as we are announcing
doctrines that have been little understood, in the past, it might not he
inappropriate to indicate their foundations.
Firstly, the Revised Penal Code in articles 365 punishes not only reckless
but also simple negligence. If we were to hold that articles 1902 to 1910 of
the Civil Code refer only to fault or negligence not punished by law,
accordingly to the literal import of article 1093 of the Civil Code, the legal
institution of culpa aquiliana would have very little scope and application in
actual life. Death or injury to persons and damage to property- through any
degree of negligence - even the slightest - would have to be Idemnified only
through the principle of civil liability arising from a crime. In such a state of
affairs, what sphere would remain for cuasi-delito or culpa aquiliana? We
are loath to impute to the lawmaker any intention to bring about a situation
so absurd and anomalous. Nor are we, in the interpretation of the laws,
disposed to uphold the letter that killeth rather than the spirit that giveth life.
We will not use the literal meaning of the law to smother and render almost
lifeless a principle of such ancient origin and such full-grown development
as culpa aquiliana or cuasi-delito, which is conserved and made enduring in
articles 1902 to 1910 of the Spanish Civil Code.
Secondary, to find the accused guilty in a criminal case, proof of guilt
beyond reasonable doubt is required, while in a civil case, preponderance of
evidence is sufficient to make the defendant pay in damages. There are
numerous cases of criminal negligence which can not be shown beyond
reasonable doubt, but can be proved by a preponderance of evidence. In
such cases, the defendant can and should be made responsible in a civil
action under articles 1902 to 1910 of the Civil Code. Otherwise. there would
be many instances of unvindicated civil wrongs. "Ubi jus Idemnified
remedium." (p. 620,73 Phil.)
Fourthly, because of the broad sweep of the provisions of both the Penal
Code and the Civil Code on this subject, which has given rise to the
overlapping or concurrence of spheres already discussed, and for lack of
understanding of the character and efficacy of the action for culpa aquiliana,
there has grown up a common practice to seek damages only by virtue of
the civil responsibility arising from a crime, forgetting that there is another
remedy, which is by invoking articles 1902-1910 of the Civil Code. Although
this habitual method is allowed by, our laws, it has nevertheless rendered
practically useless and nugatory the more expeditious and effective remedy
based on culpa aquiliana or culpa extra-contractual. In the present case, we
are asked to help perpetuate this usual course. But we believe it is high time
we pointed out to the harms done by such practice and to restore the
principle of responsibility for fault or negligence under articles 1902 et seq.
of the Civil Code to its full rigor. It is high time we caused the stream of
quasi-delict or culpa aquiliana to flow on its own natural channel, so that its
waters may no longer be diverted into that of a crime under the Penal Code.
This will, it is believed, make for the better safeguarding or private rights
because it realtor, an ancient and additional remedy, and for the further
 35

reason that an independent civil action, not depending on the issues, acts criminal in character (under Articles 29 to 32) from the civil responsibility arising from crime
limitations and results of a criminal prosecution, and entirely directed by the fixed by Article 100 of the Revised Penal Code, and, in a sense, the Rules of Court, under
party wronged or his counsel, is more likely to secure adequate and Sections 2 and 3 (c), Rule 111, contemplate also the same separability, it is "more congruent
efficacious redress. (p. 621, 73 Phil.) with the spirit of law, equity and justice, and more in harmony with modern progress"- to borrow
the felicitous relevant language in Rakes vs. Atlantic. Gulf and Pacific Co., 7 Phil. 359, to hold,
as We do hold, that Article 2176, where it refers to "fault or negligencia covers not only acts "not
Contrary to an immediate impression one might get upon a reading of the foregoing excerpts
punishable by law" but also acts criminal in character, whether intentional and voluntary or
from the opinion in Garcia that the concurrence of the Penal Code and the Civil Code therein
negligent. Consequently, a separate civil action lies against the offender in a criminal act,
referred to contemplate only acts of negligence and not intentional voluntary acts - deeper
whether or not he is criminally prosecuted and found guilty or acquitted, provided that the
reflection would reveal that the thrust of the pronouncements therein is not so limited, but that in
offended party is not allowed, if he is actually charged also criminally, to recover damages on
fact it actually extends to fault or culpa. This can be seen in the reference made therein to the
both scores, and would be entitled in such eventuality only to the bigger award of the two,
Sentence of the Supreme Court of Spain of February 14, 1919, supra, which involved a case of
assuming the awards made in the two cases vary. In other words, the extinction of civil liability
fraud or estafa, not a negligent act. Indeed, Article 1093 of the Civil Code of Spain, in force here
referred to in Par. (e) of Section 3, Rule 111, refers exclusively to civil liability founded on Article
at the time of Garcia, provided textually that obligations "which are derived from acts or
100 of the Revised Penal Code, whereas the civil liability for the same act considered as
omissions in which fault or negligence, not punishable by law, intervene shall be the subject of
a quasi-delict only and not as a crime is not estinguished even by a declaration in the criminal
Chapter II, Title XV of this book (which refers to quasi-delicts.)" And it is precisely the underline
case that the criminal act charged has not happened or has not been committed by the accused.
qualification, "not punishable by law", that Justice Bocobo emphasized could lead to an ultimo
Briefly stated, We here hold, in reiteration of Garcia, that culpa aquiliana includes voluntary and
construction or interpretation of the letter of the law that "killeth, rather than the spirit that giveth
negligent acts which may be punishable by law.4
lift- hence, the ruling that "(W)e will not use the literal meaning of the law to smother and render
almost lifeless a principle of such ancient origin and such full-grown development as culpa
aquiliana or quasi-delito, which is conserved and made enduring in articles 1902 to 1910 of the It results, therefore, that the acquittal of Reginal Hill in the criminal case has not extinguished his
Spanish Civil Code." And so, because Justice Bacobo was Chairman of the Code Commission liability for quasi-delict, hence that acquittal is not a bar to the instant action against him.
that drafted the original text of the new Civil Code, it is to be noted that the said Code, which was
enacted after the Garcia doctrine, no longer uses the term, 11 not punishable by law," thereby
Coming now to the second issue about the effect of Reginald's emancipation by marriage on the
making it clear that the concept of culpa aquiliana includes acts which are criminal in character
possible civil liability of Atty. Hill, his father, it is also Our considered opinion that the conclusion
or in violation of the penal law, whether voluntary or matter. Thus, the corresponding provisions
of appellees that Atty. Hill is already free from responsibility cannot be upheld.
to said Article 1093 in the new code, which is Article 1162, simply says, "Obligations derived
from quasi-delicto shall be governed by the provisions of Chapter 2, Title XVII of this Book,
(on quasi-delicts) and by special laws." More precisely, a new provision, Article 2177 of the new While it is true that parental authority is terminated upon emancipation of the child (Article 327,
code provides: Civil Code), and under Article 397, emancipation takes place "by the marriage of the minor
(child)", it is, however, also clear that pursuant to Article 399, emancipation by marriage of the
minor is not really full or absolute. Thus "(E)mancipation by marriage or by voluntary concession
ART. 2177. Responsibility for fault or negligence under the preceding article
shall terminate parental authority over the child's person. It shall enable the minor to administer
is entirely separate and distinct from the civil liability arising from negligence
his property as though he were of age, but he cannot borrow money or alienate or encumber
under the Penal Code. But the plaintiff cannot recover damages twice for
real property without the consent of his father or mother, or guardian. He can sue and be sued in
the same act or omission of the defendant.
court only with the assistance of his father, mother or guardian."

According to the Code Commission: "The foregoing provision (Article 2177) through at first sight
Now under Article 2180, "(T)he obligation imposed by article 2176 is demandable not only for
startling, is not so novel or extraordinary when we consider the exact nature of criminal and civil
one's own acts or omissions, but also for those of persons for whom one is responsible. The
negligence. The former is a violation of the criminal law, while the latter is a "culpa aquiliana" or
father and, in case of his death or incapacity, the mother, are responsible. The father and, in
quasi-delict, of ancient origin, having always had its own foundation and individuality, separate
case of his death or incapacity, the mother, are responsible for the damages caused by the
from criminal negligence. Such distinction between criminal negligence and "culpa
minor children who live in their company." In the instant case, it is not controverted that
extracontractual" or "cuasi-delito" has been sustained by decision of the Supreme Court of Spain
Reginald, although married, was living with his father and getting subsistence from him at the
and maintained as clear, sound and perfectly tenable by Maura, an outstanding Spanish jurist.
time of the occurrence in question. Factually, therefore, Reginald was still subservient to and
Therefore, under the proposed Article 2177, acquittal from an accusation of criminal negligence,
dependent on his father, a situation which is not unusual.
whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for civil
liability arising from criminal negligence, but for damages due to a quasi-delict or 'culpa
aquiliana'. But said article forestalls a double recovery.", (Report of the Code) Commission, p. It must be borne in mind that, according to Manresa, the reason behind the joint and solidary
162.) liability of presuncion with their offending child under Article 2180 is that is the obligation of the
parent to supervise their minor children in order to prevent them from causing damage to third
persons. 5 On the other hand, the clear implication of Article 399, in providing that a minor
Although, again, this Article 2177 does seem to literally refer to only acts of negligence, the
emancipated by marriage may not, nevertheless, sue or be sued without the assistance of the
same argument of Justice Bacobo about construction that upholds "the spirit that giveth lift-
parents, is that such emancipation does not carry with it freedom to enter into transactions or do
rather than that which is literal that killeth the intent of the lawmaker should be observed in
any act that can give rise to judicial litigation. (See Manresa, Id., Vol. II, pp. 766-767, 776.) And
applying the same. And considering that the preliminary chapter on human relations of the new
surely, killing someone else invites judicial action. Otherwise stated, the marriage of a minor
Civil Code definitely establishes the separability and independence of liability in a civil action for
child does not relieve the parents of the duty to see to it that the child, while still a minor, does
 36

not give answerable for the borrowings of money and alienation or encumbering of real property
which cannot be done by their minor married child without their consent. (Art. 399;
Manresa, supra.)

Accordingly, in Our considered view, Article 2180 applies to Atty. Hill notwithstanding the
emancipation by marriage of Reginald. However, inasmuch as it is evident that Reginald is now
of age, as a matter of equity, the liability of Atty. Hill has become milling, subsidiary to that of his
son.

WHEREFORE, the order appealed from is reversed and the trial court is ordered to proceed in
accordance with the foregoing opinion. Costs against appellees.
 37
THIRD DIVISION
G.R. No. 85044 June 3, 1992
MACARIO TAMARGO, CELSO TAMARGO and AURELIA TAMARGO, petitioners,
vs.
HON. COURT OF APPEALS, THE HON. ARISTON L. RUBIO, RTC Judge, Branch 20, Vigan,
Ilocos Sur; VICTOR BUNDOC; and CLARA BUNDOC, respondents.
FELICIANO, J.:
On 20 October 1982, Adelberto Bundoc, then a minor of 10 years of age, shot Jennifer Tamargo
with an air rifle causing injuries which resulted in her death. Accordingly, a civil complaint for
damages was filed with the Regional Trial Court, Branch 20, Vigan, Ilocos Sur, docketed as Civil
Case No. 3457-V, by petitioner Macario Tamargo, Jennifer's adopting parent, and petitioner
spouses Celso and Aurelia Tamargo, Jennifer's natural parents against respondent spouses
Victor and Clara Bundoc, Adelberto's natural parents with whom he was living at the time of the
tragic incident. In addition to this case for damages, a criminal information or Homicide through
Reckless Imprudence was filed [Criminal Case No. 1722-V] against Adelberto Bundoc.
Adelberto, however, was acquitted and exempted from criminal liability on the ground that he
bad acted without discernment.
Prior to the incident, or on 10 December 1981, the spouses Sabas and Felisa Rapisura had filed
a petition to adopt the minor Adelberto Bundoc in Special Proceedings No. 0373-T before the
then Court of First Instance of Ilocos Sur. This petition for adoption was grunted on, 18
November 1982, that is, after Adelberto had shot and killed Jennifer.
In their Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting the result of
the foregoing petition for adoption, claimed that not they, but rather the adopting parents, namely
the spouses Sabas and Felisa Rapisura, were indispensable parties to the action since parental
authority had shifted to the adopting parents from the moment the successful petition for
adoption was filed.
Petitioners in their Reply contended that since Adelberto Bundoc was then actually living with his
natural parents, parental authority had not ceased nor been relinquished by the mere filing and
granting of a petition for adoption.
The trial court on 3 December 1987 dismissed petitioners' complaint, ruling that respondent
natural parents of Adelberto indeed were not indispensable parties to the action.
Petitioners received a copy of the trial court's Decision on 7 December 1987. Within the 15-day
reglementary period, or on 14 December 1987, petitioners filed a motion for reconsideration
followed by a supplemental motion for reconsideration on 15 January 1988. It appearing,
however, that the motions failed to comply with Sections 4 and 5 of Rule 15 of the Revised
Rules of Court — that notice of the motion shall be given to all parties concerned at least three
(3) days before the hearing of said motion; and that said notice shall state the time and place of
hearing — both motions were denied by the trial court in an Order dated 18 April 1988. On 28
April 1988, petitioners filed a notice of appeal. In its Order dated 6 June 1988, the trial court
dismissed the notice at appeal, this time ruling that the notice had been filed beyond the 15-day
reglementary period ending 22 December 1987.
Petitioners went to the Court of Appeals on a petition for mandamus and certiorari questioning
the trial court's Decision dated 3 December 1987 and the Orders dated 18 April 1988 and 6 June
1988, The Court of Appeals dismissed the petition, ruling that petitioners had lost their right to
appeal.
In the present Petition for Review, petitioners once again contend that respondent spouses
Bundoc are the indispensable parties to the action for damages caused by the acts of their minor
child, Adelberto Bundoc. Resolution of this Petition hinges on the following issues: (1) whether or
not petitioners, notwithstanding loss of their right to appeal, may still file the instant Petition;
conversely, whether the Court may still take cognizance of the case even through petitioners'
appeal had been filed out of time; and (2) whether or not the effects of adoption, insofar as
parental authority is concerned may be given retroactive effect so as to make the adopting
parents the indispensable parties in a damage case filed against their adopted child, for acts
committed by the latter, when actual custody was yet lodged with the biological parents.
1. It will be recalled that, petitioners' motion (and supplemental motion) for reconsideration filed
before the trial court, not having complied with the requirements of Section 13, Rule 41, and
Section 4, Rule 15, of the Revised Rules of Court, were considered pro forma and hence did not
interrupt and suspend the reglementary period to appeal: the trial court held that the motions, not
having contained a notice of time and place of hearing, had become useless pieces of paper
which did not interrupt the reglementary period. 1 As in fact repeatedly held by this Court, what is
mandatory is the service of the motion on the opposing counsel indicating the time and place of
hearing. 2
In view, however, of the nature of the issue raised in the instant. Petition, and in order that
substantial justice may be served, the Court, invoking its right to suspend the application of
technical rules to prevent manifest injustice, elects to treat the notice of appeal as having been
seasonably filed before the trial court, and the motion (and supplemental motion) for
reconsideration filed by petitioner in the trial court as having interrupted the reglementary period
for appeal. As the Court held in Gregorio v. Court of Appeals: 3
Dismissal of appeal; purely on technical grounds is frowned upon where the
policy of the courts is to encourage hearings of appeal on their merits. The
rules of procedure ought not be applied in a very rigid technical sense, rules
of procedure are used only to help secure not override, substantial justice. if
d technical and rigid enforcement of the rules is made their aim would be
defeated. 4
2. It is not disputed that Adelberto Bundoc's voluntary act of shooting Jennifer Tamargo with an
air rifle gave rise to a cause of action on quasi-delict against him. As Article 2176 of the Civil
Code provides:
Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence,
if there is no pre-existing contractual relation between the parties, is called
a quasi-delict . . .
 38

Upon the other hand, the law imposes civil liability upon the father and, in case of his death or authority. The parental dereliction is, of course, only presumed and the presumption
incapacity, the mother, for any damages that may be caused by a minor child who lives with can be overtuned under Article 2180 of the Civil Code by proof that the parents had
them. Article 2180 of the Civil Code reads: exercised all the diligence of a good father of a family to prevent the damage.

The obligation imposed by article 2176 is demandable not only for one's
own acts or omissions, but also for those of persons for whom one is
responsible.
The father and, in case of his death or incapacity, the mother, are
responsible for the damages caused by the minor children who live in their
company.
xxx xxx xxx
In the instant case, the shooting of Jennifer by Adelberto with an air rifle occured when parental
authority was still lodged in respondent Bundoc spouses, the natural parents of the minor
Adelberto. It would thus follow that the natural parents who had then actual custody of the minor
Adelberto, are the indispensable parties to the suit for damages.
The natural parents of Adelberto, however, stoutly maintain that because a decree of adoption
was issued by the adoption court in favor of the Rapisura spouses, parental authority was vested
in the latter as adopting parents as of the time of the filing of the petition for adoption that
is, before Adelberto had shot Jennifer which an air rifle. The Bundoc spouses contend that they
were therefore free of any parental responsibility for Adelberto's allegedly tortious conduct.

The responsibility treated of in this Article shall cease when the person
Respondent Bundoc spouses rely on Article 36 of the Child and Youth Welfare Code 8 which
herein mentioned prove that they observed all the diligence of a good father
reads as follows:
of a family to prevent damage. (Emphasis supplied)

Art. 36. Decree of Adoption. — If, after considering the report of the
This principle of parental liability is a species of what is frequently designated as vicarious
Department of Social Welfare or duly licensed child placement agency and
liability, or the doctrine of "imputed negligence" under Anglo-American tort law, where a person
the evidence submitted before it, the court is satisfied that the petitioner is
is not only liable for torts committed by himself, but also for torts committed by others with whom
qualified to maintain, care for, and educate the child, that the trial custody
he has a certain relationship and for whom he is responsible. Thus, parental liability is made a
period has been completed, and that the best interests of the child will be
natural or logical consequence of the duties and responsibilities of parents — their parental
promoted by the adoption, a decree of adoption shall be entered, which
authority — which includes the instructing, controlling and disciplining of the child. 5 The basis for
shall be effective he date the original petition was filed. The decree shall
the doctrine of vicarious liability was explained by the Court in Cangco v. Manila Railroad
state the name by which the child is thenceforth to be known. (Emphasis
Co. 6 in the following terms:
supplied)

With respect to extra-contractual obligation arising from negligence, whether

The Bundoc spouses further argue that the above Article 36 should be read in relation
of act or omission, it is competent for the legislature to elect — and our
to Article 39 of the same Code:
Legislature has so elected — to limit such liability to cases in which the
person upon whom such an obligation is imposed is morally culpable or, on
the contrary, for reasons of public policy. to extend that liability, without Art. 39. Effect of Adoption. — The adoption shall:
regard to the lack of moral culpability, so as to include responsibility for the
negligence of those persons whose acts or omissions are imputable, by a
xxx xxx xxx
legal fiction, to others who are in a position to exercise an absolute or
limited control over them. The legislature which adopted our Civil Code has
elected to limit extra-contractual liability — with certain well-defined (2) Dissolve the authority vested in the natural parents, except where the
exceptions — to cases in which moral culpability can be directly imputed to adopter is the spouse of the surviving natural parent;
the persons to be charged. This moral responsibility may consist in having
failed to exercise due care in one's own acts, or in having failed to exercise
due care in the selection and control of one's agent or servants, or in the xxx xxx xxx
control of persons who, by reasons of their status, occupy a position of
dependency with respect to the person made liable for their (Emphasis supplied)
conduct. 7 (Emphasis Supplied)
and urge that their Parental authority must be deemed to have been dissolved as of the time the
The civil liability imposed upon parents for the torts of their minor children living with Petition for adoption was filed.
them, may be seen to be based upon the parental authority vested by the Civil Code
upon such parents. The civil law assumes that when an unemancipated child living
with its parents commits a tortious acts, the parents were negligent in the performance The Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental liability
of their legal and natural duty closely to supervise the child who is in their custody and for the torts of a minor child is the relationship existing between the parents and the minor child
control. Parental liability is, in other words, anchored upon parental authority coupled living with them and over whom, the law presumes, the parents exercise supervision and control.
with presumed parental dereliction in the discharge of the duties accompanying such Article 58 of the Child and Youth Welfare Code, re-enacted this rule:
 39

Article 58 Torts — Parents and guardians are responsible for the damage WHEREFORE, premises considered, the Petition for Review is hereby GRANTED DUE
caused by the child under their parental authority in accordance with the COURSE and the Decision of the Court of Appeals dated 6 September 1988, in C.A.-G.R. No.
civil Code. (Emphasis supplied) SP-15016 is hereby REVERSED and SET ASIDE. Petitioners' complaint filed before the trial
court is hereby REINSTATED and this case is REMANDED to that court for further proceedings
consistent with this Decision. Costs against respondent Bundoc spouses. This Decision is
Article 221 of the Family Code of the Philippines 9 has similarly insisted upon the requisite that
immediately executory.
the child, doer of the tortious act, shall have beer in the actual custody of the parents sought to
be held liable for the ensuing damage:
SO ORDERED.
Art. 221. Parents and other persons exercising parental authority shall be
civilly liable for the injuries and damages caused by the acts or omissions of
their unemancipated children living in their companyand under their parental
authority subject to the appropriate defenses provided by law. (Emphasis
supplied)

We do not believe that parental authority is properly regarded as having been retroactively
transferred to and vested in the adopting parents, the Rapisura spouses, at the time the air rifle
shooting happened. We do not consider that retroactive effect may be giver to the decree of
adoption so as to impose a liability upon the adopting parents accruing at a time when adopting
parents had no actual or physically custody over the adopted child. Retroactive affect may
perhaps be given to the granting of the petition for adoption where such is essential to permit the
accrual of some benefit or advantage in favor of the adopted child. In the instant case, however,
to hold that parental authority had been retroactively lodged in the Rapisura spouses so as to
burden them with liability for a tortious act that they could not have foreseen and which they
could not have prevented (since they were at the time in the United States and had no physical
custody over the child Adelberto) would be unfair and unconscionable. Such a result, moreover,
would be inconsistent with the philosophical and policy basis underlying the doctrine of vicarious
liability. Put a little differently, no presumption of parental dereliction on the part of the adopting
parents, the Rapisura spouses, could have arisen since Adelberto was not in fact subject to their
control at the time the tort was committed.

Article 35 of the Child and Youth Welfare Code fortifies the conclusion reached above. Article 35
provides as follows:

Art. 35. Trial Custody. — No petition for adoption shall be finally granted
unless and until the adopting parents are given by the courts a supervised
trial custody period of at least six months to assess their adjustment and
emotional readiness for the legal union. During the period of trial custody,
parental authority shall be vested in the adopting parents. (Emphasis
supplied)

Under the above Article 35, parental authority is provisionally vested in the adopting parents
during the period of trial custody, i.e., before the issuance of a decree of adoption, precisely
because the adopting parents are given actual custody of the child during such trial period. In
the instant case, the trial custody period either had not yet begun or bad already been completed
at the time of the air rifle shooting; in any case, actual custody of Adelberto was then with his
natural parents, not the adopting parents.

Accordingly, we conclude that respondent Bundoc spouses, Adelberto's natural parents, were
indispensable parties to the suit for damages brought by petitioners, and that the dismissal by
the trial court of petitioners' complaint, the indispensable parties being already before the court,
constituted grave abuse of discretion amounting to lack or excess of jurisdiction.
 40
EN BANC
G.R. No. L-11154 March 21, 1916
E. MERRITT, plaintiff-appellant,
vs.
GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.
Crossfield and O'Brien for plaintiff.
Attorney-General Avanceña for defendant..
TRENT, J.:
This is an appeal by both parties from a judgment of the Court of First Instance of the city of
Manila in favor of the plaintiff for the sum of P14,741, together with the costs of the cause.
Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general damages which
the plaintiff suffered to P5,000, instead of P25,000 as claimed in the complaint," and (2) "in
limiting the time when plaintiff was entirely disabled to two months and twenty-one days and
fixing the damage accordingly in the sum of P2,666, instead of P6,000 as claimed by plaintiff in
his complaint."
The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in finding
that the collision between the plaintiff's motorcycle and the ambulance of the General Hospital
was due to the negligence of the chauffeur; (b) in holding that the Government of the Philippine
Islands is liable for the damages sustained by the plaintiff as a result of the collision, even if it be
true that the collision was due to the negligence of the chauffeur; and (c) in rendering judgment
against the defendant for the sum of P14,741.
The trial court's findings of fact, which are fully supported by the record, are as follows:
It is a fact not disputed by counsel for the defendant that when the plaintiff, riding on a
motorcycle, was going toward the western part of Calle Padre Faura, passing along
the west side thereof at a speed of ten to twelve miles an hour, upon crossing Taft
Avenue and when he was ten feet from the southwestern intersection of said streets,
the General Hospital ambulance, upon reaching said avenue, instead of turning
toward the south, after passing the center thereof, so that it would be on the left side
of said avenue, as is prescribed by the ordinance and the Motor Vehicle Act, turned
suddenly and unexpectedly and long before reaching the center of the street, into the
right side of Taft Avenue, without having sounded any whistle or horn, by which
movement it struck the plaintiff, who was already six feet from the southwestern point
or from the post place there.
By reason of the resulting collision, the plaintiff was so severely injured that, according
to Dr. Saleeby, who examined him on the very same day that he was taken to the
General Hospital, he was suffering from a depression in the left parietal region, a
would in the same place and in the back part of his head, while blood issued from his
nose and he was entirely unconscious.
The marks revealed that he had one or more fractures of the skull and that the grey
matter and brain was had suffered material injury. At ten o'clock of the night in
question, which was the time set for performing the operation, his pulse was so weak
and so irregular that, in his opinion, there was little hope that he would live. His right
leg was broken in such a way that the fracture extended to the outer skin in such
manner that it might be regarded as double and the would be exposed to infection, for
which reason it was of the most serious nature.
At another examination six days before the day of the trial, Dr. Saleeby noticed that
the plaintiff's leg showed a contraction of an inch and a half and a curvature that made
his leg very weak and painful at the point of the fracture. Examination of his head
revealed a notable readjustment of the functions of the brain and nerves. The patient
apparently was slightly deaf, had a light weakness in his eyes and in his mental
condition. This latter weakness was always noticed when the plaintiff had to do any
difficult mental labor, especially when he attempted to use his money for mathematical
calculations.
According to the various merchants who testified as witnesses, the plaintiff's mental
and physical condition prior to the accident was excellent, and that after having
received the injuries that have been discussed, his physical condition had undergone
a noticeable depreciation, for he had lost the agility, energy, and ability that he had
constantly displayed before the accident as one of the best constructors of wooden
buildings and he could not now earn even a half of the income that he had secured for
his work because he had lost 50 per cent of his efficiency. As a contractor, he could
no longer, as he had before done, climb up ladders and scaffoldings to reach the
highest parts of the building.
As a consequence of the loss the plaintiff suffered in the efficiency of his work as a
contractor, he had to dissolved the partnership he had formed with the engineer.
Wilson, because he was incapacitated from making mathematical calculations on
account of the condition of his leg and of his mental faculties, and he had to give up a
contract he had for the construction of the Uy Chaco building."
We may say at the outset that we are in full accord with the trial court to the effect that the
collision between the plaintiff's motorcycle and the ambulance of the General Hospital was due
solely to the negligence of the chauffeur.
The two items which constitute a part of the P14,741 and which are drawn in question by the
plaintiff are (a) P5,000, the award awarded for permanent injuries, and (b) the P2,666, the
amount allowed for the loss of wages during the time the plaintiff was incapacitated from
pursuing his occupation. We find nothing in the record which would justify us in increasing the
amount of the first. As to the second, the record shows, and the trial court so found, that the
plaintiff's services as a contractor were worth P1,000 per month. The court, however, limited the
time to two months and twenty-one days, which the plaintiff was actually confined in the hospital.
In this we think there was error, because it was clearly established that the plaintiff was wholly
incapacitated for a period of six months. The mere fact that he remained in the hospital only two
months and twenty-one days while the remainder of the six months was spent in his home,
would not prevent recovery for the whole time. We, therefore, find that the amount of damages
sustained by the plaintiff, without any fault on his part, is P18,075.
 41
As the negligence which caused the collision is a tort committed by an agent or employee of the
Government, the inquiry at once arises whether the Government is legally-liable for the damages
resulting therefrom.
Act No. 2457, effective February 3, 1915, reads:
An Act authorizing E. Merritt to bring suit against the Government of the Philippine
Islands and authorizing the Attorney-General of said Islands to appear in said suit.
Whereas a claim has been filed against the Government of the Philippine Islands by
Mr. E. Merritt, of Manila, for damages resulting from a collision between his motorcycle
and the ambulance of the General Hospital on March twenty-fifth, nineteen hundred
and thirteen;
Whereas it is not known who is responsible for the accident nor is it possible to
determine the amount of damages, if any, to which the claimant is entitled; and
Whereas the Director of Public Works and the Attorney-General recommended that an
Act be passed by the Legislature authorizing Mr. E. Merritt to bring suit in the courts
against the Government, in order that said questions may be decided: Now, therefore,
By authority of the United States, be it enacted by the Philippine Legislature, that:
SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance
of the city of Manila against the Government of the Philippine Islands in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the
General Hospital, and to determine the amount of the damages, if any, to which Mr. E.
Merritt is entitled on account of said collision, and the Attorney-General of the
Philippine Islands is hereby authorized and directed to appear at the trial on the behalf
of the Government of said Islands, to defendant said Government at the same.
SEC. 2. This Act shall take effect on its passage.
Enacted, February 3, 1915.
Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did it
also concede its liability to the plaintiff? If only the former, then it cannot be held that the Act
created any new cause of action in favor of the plaintiff or extended the defendant's liability to
any case not previously recognized.
All admit that the Insular Government (the defendant) cannot be sued by an individual without its
consent. It is also admitted that the instant case is one against the Government. As the consent
of the Government to be sued by the plaintiff was entirely voluntary on its part, it is our duty to
look carefully into the terms of the consent, and render judgment accordingly.
The plaintiff was authorized to bring this action against the Government "in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the General Hospital
and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled on
account of said collision, . . . ." These were the two questions submitted to the court for
determination. The Act was passed "in order that said questions may be decided." We have
"decided" that the accident was due solely to the negligence of the chauffeur, who was at the
time an employee of the defendant, and we have also fixed the amount of damages sustained
by the plaintiff as a result of the collision. Does the Act authorize us to hold that the Government
is legally liable for that amount? If not, we must look elsewhere for such authority, if it exists.
The Government of the Philippine Islands having been "modeled after the Federal and State
Governments in the United States," we may look to the decisions of the high courts of that
country for aid in determining the purpose and scope of Act No. 2457.
In the United States the rule that the state is not liable for the torts committed by its officers or
agents whom it employs, except when expressly made so by legislative enactment, is well
settled. "The Government," says Justice Story, "does not undertake to guarantee to any person
the fidelity of the officers or agents whom it employs, since that would involve it in all its
operations in endless embarrassments, difficulties and losses, which would be subversive of the
public interest." (Claussen vs. City of Luverne, 103 Minn., 491, citing U. S. vs. Kirkpatrick, 9
Wheat, 720; 6 L. Ed., 199; and Beers vs. States, 20 How., 527; 15 L. Ed., 991.)
In the case of Melvin vs. State (121 Cal., 16), the plaintiff sought to recover damages from the
state for personal injuries received on account of the negligence of the state officers at the state
fair, a state institution created by the legislature for the purpose of improving agricultural and
kindred industries; to disseminate information calculated to educate and benefit the industrial
classes; and to advance by such means the material interests of the state, being objects similar
to those sought by the public school system. In passing upon the question of the state's liability
for the negligent acts of its officers or agents, the court said:
No claim arises against any government is favor of an individual, by reason of the
misfeasance, laches, or unauthorized exercise of powers by its officers or agents.
(Citing Gibbons vs. U. S., 8 Wall., 269; Clodfelter vs. State, 86 N. C., 51, 53; 41 Am.
Rep., 440; Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Green vs. State,
73 Cal., 29; Bourn vs. Hart, 93 Cal., 321; 27 Am. St. Rep., 203; Story on Agency, sec.
319.)
As to the scope of legislative enactments permitting individuals to sue the state where the cause
of action arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus:
By consenting to be sued a state simply waives its immunity from suit. It does not
thereby concede its liability to plaintiff, or create any cause of action in his favor, or
extend its liability to any cause not previously recognized. It merely gives a remedy to
enforce a preexisting liability and submits itself to the jurisdiction of the court, subject
to its right to interpose any lawful defense.
In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act of
1913, which authorized the bringing of this suit, read:
SECTION 1. Authority is hereby given to George Apfelbacher, of the town of Summit,
Waukesha County, Wisconsin, to bring suit in such court or courts and in such form or
forms as he may be advised for the purpose of settling and determining all
controversies which he may now have with the State of Wisconsin, or its duly
authorized officers and agents, relative to the mill property of said George
Apfelbacher, the fish hatchery of the State of Wisconsin on the Bark River, and the mill
 42
property of Evan Humphrey at the lower end of Nagawicka Lake, and relative to the
use of the waters of said Bark River and Nagawicka Lake, all in the county of
Waukesha, Wisconsin.
In determining the scope of this act, the court said:
Plaintiff claims that by the enactment of this law the legislature admitted liability on the
part of the state for the acts of its officers, and that the suit now stands just as it would
stand between private parties. It is difficult to see how the act does, or was intended to
do, more than remove the state's immunity from suit. It simply gives authority to
commence suit for the purpose of settling plaintiff's controversies with the estate.
Nowhere in the act is there a whisper or suggestion that the court or courts in the
disposition of the suit shall depart from well established principles of law, or that the
amount of damages is the only question to be settled. The act opened the door of the
court to the plaintiff. It did not pass upon the question of liability, but left the suit just
where it would be in the absence of the state's immunity from suit. If the Legislature
had intended to change the rule that obtained in this state so long and to declare
liability on the part of the state, it would not have left so important a matter to mere
inference, but would have done so in express terms. (Murdock Grate Co. vs.
Commonwealth, 152 Mass., 28; 24 N.E., 854; 8 L. R. A., 399.)
In Denning vs. State (123 Cal., 316), the provisions of the Act of 1893, relied upon and
considered, are as follows:
All persons who have, or shall hereafter have, claims on contract or for negligence
against the state not allowed by the state board of examiners, are hereby authorized,
on the terms and conditions herein contained, to bring suit thereon against the state in
any of the courts of this state of competent jurisdiction, and prosecute the same to
final judgment. The rules of practice in civil cases shall apply to such suits, except as
herein otherwise provided.
And the court said:
This statute has been considered by this court in at least two cases, arising under
different facts, and in both it was held that said statute did not create any liability or
cause of action against the state where none existed before, but merely gave an
additional remedy to enforce such liability as would have existed if the statute had not
been enacted. (Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Melvin vs.
State, 121 Cal., 16.)
A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all claims
against the commonwealth, whether at law or in equity," with an exception not necessary to be
here mentioned. In construing this statute the court, in Murdock Grate Co. vs.
Commonwealth (152 Mass., 28), said:
The statute we are discussing disclose no intention to create against the state a new
and heretofore unrecognized class of liabilities, but only an intention to provide a
judicial tribunal where well recognized existing liabilities can be adjudicated.
In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of the
statute of New York, jurisdiction of claims for damages for injuries in the management of the
canals such as the plaintiff had sustained, Chief Justice Ruger remarks: "It must be conceded
that the state can be made liable for injuries arising from the negligence of its agents or
servants, only by force of some positive statute assuming such liability."
It being quite clear that Act No. 2457 does not operate to extend the Government's liability to
any cause not previously recognized, we will now examine the substantive law touching the
defendant's liability for the negligent acts of its officers, agents, and employees. Paragraph 5 of
article 1903 of the Civil Code reads:
The state is liable in this sense when it acts through a special agent, but not when the
damage should have been caused by the official to whom properly it pertained to do
the act performed, in which case the provisions of the preceding article shall be
applicable.
The supreme court of Spain in defining the scope of this paragraph said:
That the obligation to indemnify for damages which a third person causes to another
by his fault or negligence is based, as is evidenced by the same Law 3, Title 15,
Partida 7, on that the person obligated, by his own fault or negligence, takes part in
the act or omission of the third party who caused the damage. It follows therefrom that
the state, by virtue of such provisions of law, is not responsible for the damages
suffered by private individuals in consequence of acts performed by its employees in
the discharge of the functions pertaining to their office, because neither fault nor even
negligence can be presumed on the part of the state in the organization of branches of
public service and in the appointment of its agents; on the contrary, we must
presuppose all foresight humanly possible on its part in order that each branch of
service serves the general weal an that of private persons interested in its operation.
Between these latter and the state, therefore, no relations of a private nature governed
by the civil law can arise except in a case where the state acts as a judicial person
capable of acquiring rights and contracting obligations. (Supreme Court of Spain,
January 7, 1898; 83 Jur. Civ., 24.)
That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise
out of fault or negligence; and whereas in the first article thereof. No. 1902, where the
general principle is laid down that where a person who by an act or omission causes
damage to another through fault or negligence, shall be obliged to repair the damage
so done, reference is made to acts or omissions of the persons who directly or
indirectly cause the damage, the following articles refers to this persons and imposes
an identical obligation upon those who maintain fixed relations of authority and
superiority over the authors of the damage, because the law presumes that in
consequence of such relations the evil caused by their own fault or negligence is
imputable to them. This legal presumption gives way to proof, however, because, as
held in the last paragraph of article 1903, responsibility for acts of third persons
ceases when the persons mentioned in said article prove that they employed all the
diligence of a good father of a family to avoid the damage, and among these persons,
called upon to answer in a direct and not a subsidiary manner, are found, in addition to
the mother or the father in a proper case, guardians and owners or directors of an
establishment or enterprise, the state, but not always, except when it acts through the
agency of a special agent, doubtless because and only in this case, the fault or
negligence, which is the original basis of this kind of objections, must be presumed to
lie with the state.
 43

That although in some cases the state might by virtue of the general principle set forth
in article 1902 respond for all the damage that is occasioned to private parties by
orders or resolutions which by fault or negligence are made by branches of the central
administration acting in the name and representation of the state itself and as an
external expression of its sovereignty in the exercise of its executive powers, yet said
article is not applicable in the case of damages said to have been occasioned to the
petitioners by an executive official, acting in the exercise of his powers, in proceedings
to enforce the collections of certain property taxes owing by the owner of the property
which they hold in sublease.

That the responsibility of the state is limited by article 1903 to the case wherein it
acts through a special agent(and a special agent, in the sense in which these words
are employed, is one who receives a definite and fixed order or commission, foreign to
the exercise of the duties of his office if he is a special official) so that in
representation of the state and being bound to act as an agent thereof, he executes
the trust confided to him. This concept does not apply to any executive agent who is
an employee of the acting administration and who on his own responsibility performs
the functions which are inherent in and naturally pertain to his office and which are
regulated by law and the regulations." (Supreme Court of Spain, May 18, 1904; 98
Jur. Civ., 389, 390.)

That according to paragraph 5 of article 1903 of the Civil Code and the principle laid
down in a decision, among others, of the 18th of May, 1904, in a damage case, the
responsibility of the state is limited to that which it contracts through a special agent,
duly empowered by a definite order or commission to perform some act or charged
with some definite purpose which gives rise to the claim, and not where the claim is
based on acts or omissions imputable to a public official charged with some
administrative or technical office who can be held to the proper responsibility in the
manner laid down by the law of civil responsibility. Consequently, the trial court in not
so deciding and in sentencing the said entity to the payment of damages, caused by
an official of the second class referred to, has by erroneous interpretation infringed the
provisions of articles 1902 and 1903 of the Civil Code. (Supreme Court of Spain, July
30, 1911; 122 Jur. Civ., 146.)

It is, therefore, evidence that the State (the Government of the Philippine Islands) is only liable,
according to the above quoted decisions of the Supreme Court of Spain, for the acts of its
agents, officers and employees when they act as special agents within the meaning of
paragraph 5 of article 1903, supra, and that the chauffeur of the ambulance of the General
Hospital was not such an agent.

For the foregoing reasons, the judgment appealed from must be reversed, without costs in this
instance. Whether the Government intends to make itself legally liable for the amount of
damages above set forth, which the plaintiff has sustained by reason of the negligent acts of one
of its employees, by legislative enactment and by appropriating sufficient funds therefor, we are
not called upon to determine. This matter rests solely with the Legislature and not with the
courts.
 44

Merritt vs GPI in rendering judgment against the defendant for the sum of P14,741.

Waiver of Sovereign Immunity Issues:

MERRITT VS GPI Whether or not the Government is legally liable to the plaintiff by allowing a lawsuit to commence
G.R. No. L-11154 34 Phil 311 March 21, 1916 against it.

Whether or not the ambulance driver is considered as an employee of the government.

MERRITT, plaintiff-appellant, Discussions:

vs. The waiver of immunity of the State does not mean concession of its liability. When the State
allows itself to be sued, all it does in effect is to give the other party an opportunity to prove, if it
can, that the State is liable.
GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.

Facts:
The case is an appeal by both parties from a judgment of the Court of First Instance of the city of
Manila in favor of the plaintiff for the sum of P14,741, together with the costs of the cause.
Prior to this appeal, Plaintiff E. Meritt, a contractor, had a collision with the General Hospital
Ambulance which turned suddenly and unexpectedly without having sounded any whistle or
horn. Merrit was severely injured. His condition had undergone depreciation and his efficiency as
a contractor was affected. The plaintiff is seeking a certain amount for permanent injuries and
the loss of wages during he was incapacitated from pursuing his occupation. In order for Merritt
to recover damages, he sought to sue the government which later authorized the plaintiff to bring
suit against the GPI and authorizing the Attorney- General to appear in said suit.
On this appeal, Counsel for the plaintiff insists that the trial court erred:
“in limiting the general damages which the plaintiff suffered to P5,000, instead of P25,000 as
claimed in the complaint,” and
“in limiting the time when plaintiff was entirely disabled to two months and twenty-one days and
fixing the damage accordingly in the sum of P2,666, instead of P6,000 as claimed by plaintiff in
his complaint.”
Art. 1903, Par. 5 of the Civil Code reads that “The state is liable in this sense when it acts
through a special agent, but not when the damage should have been caused by the official to
whom properly it pertained to do the act performed, in which case the provisions of the
preceding article shall be applicable. The responsibility of the state is limited to that which it
contracts through a special agent, duly empowered by a definite order or commission to perform
some act or charged with some definite purpose which gives rise to the claim.
Rulings:
By consenting to be sued a state simply waives its immunity from suit. It does not thereby
concede its liability to plaintiff, or create any cause of action in his favor, or extend its liability to
any cause not previously recognized. It merely gives a remedy to enforce a pre-existing liability
and submits itself to the jurisdiction of the court, subject to its right to interpose any lawful
defense.
In the case at bar, the ambulance driver was not a special agent nor was a government officer
acting as a special agent. Hence, there can be no liability from the government. As stated by
Justice Story of United States “The Government does not undertake to guarantee to any person
the fidelity of the officers or agents whom it employs, since that would involve it in all its
operations in endless embarrassments, difficulties and losses, which would be subversive of the
public interest.”

On the other hand, the Attorney-General on behalf of the defendant urges that the trial court
erred:

in finding that the collision between the plaintiff’s motorcycle and the ambulance of the General
Hospital was due to the negligence of the chauffeur, who is an alleged agent or employee of the
Government;

in holding that the Government of the Philippine Islands is liable for the damages sustained by
the plaintiff as a result of the collision, even if it be true that the collision was due to the
negligence of the chauffeur; and
 45

EN BANC ART. 1903. The obligation impossed by the next preceding articles is enforceable not
only for personal acts and omissions, but also for those of persons for whom another
is responsible.
G.R. No. L-10134 June 29, 1957

The father, and, in case of his death or incapacity, the mother, are liable for any
SABINA EXCONDE, plaintiff-appellant,
damages caused by the minor children who live with them.
vs.
DELFIN CAPUNO and DANTE CAPUNO, defendants-appellees.
xxx xxx xxx
Magno T. Bueser for appellant.
Alver Law Offices and Edon B. Brion and Vencedor A. Alimario for appellees. Finally, teachers or directors of arts and trades are liable for any damages caused by
their pupils or apprentices while they are under their custody.
BAUTISTA ANGELO, J.:
Plaintiff contends that defendant Delfin Capuno is liable for the damages in question jointly and
severally with his son Dante because at the time the latter committed the negligent act which
Dante Capuno, son of Delfin Capuno, was accused of double homicide through reckless
resulted in the death of the victim, he was a minor and was then living with his father, and
imprudence for the death of Isidoro Caperina and Amado Ticzon on March 31, 1949 in the Court
inasmuch as these facts are not disputed, the civil liability of the father is evident. And so,
of First Instance of Laguna (Criminal Case No. 15001). During the trial, Sabina Exconde, as
plaintiff contends, the lower court erred in relieving the father from liability.
mother of the deceased Isidoro Caperina, reserved her right to bring a separate civil action for
damages against the accused. After trial, Dante Capuno was found guilty of the crime charged
and, on appeal, the Court Appeals affirmed the decision. Dante Capuno was only (15) years old We find merit in this claim. It is true that under the law above quoted, "teachers or directors of
when he committed the crime. arts and trades are liable for any damages caused by their pupils or apprentices while they are
under their custody", but this provision only applies to an institution of arts and trades and not to
any academic educational institution (Padilla, Civil Law, 1953, Ed., Vol. IV, p. 841; See 12
In line with her reservation, Sabina Exconde filed the present action against Delfin Capuno and
Manresa, 4th Ed., p. 557). Here Dante capuno was then a student of the Balintawak Elementary
his son Dante Capuno asking for damages in the aggregate amount of P2,959.00 for the death
School and as part of his extra-curricular activity, he attended the parade in honor of Dr. Jose
of her son Isidoro Caperiña. Defendants set up the defense that if any one should be held liable
Rizal upon instruction of the city school's supervisor. And it was in connection with that parade
for the death of Isidoro Caperina, he is Dante Capuno and not his father Delfin because at the
that Dante boarded a jeep with some companions and while driving it, the accident occurred. In
time of the accident, the former was not under the control, supervision and custody, of the latter.
the circumstances, it is clear that neither the head of that school, nor the city school's supervisor,
This defense was sustained by the lower court and, as a consequence it only convicted Dante
could be held liable for the negligent act of Dante because he was not then a student of an
Capuno to pay the damages claimed in the complaint. From decision, plaintiff appealed to the
institute of arts and trades as provided by law.
Court of Appeals but the case was certified to us on the ground that the appeal only involves
questions of law.
The civil liability which the law impose upon the father, and, in case of his death or incapacity,
the mother, for any damages that may be caused by the minor children who live with them, is
It appears that Dante Capuno was a member of the Boy Scouts Organization and a student of
obvious. This is necessary consequence of the parental authority they exercise over them which
the Bilintawak Elementary School situated in a barrio in the City of San Pablo and on March 31,
imposes upon the parents the "duty of supporting them, keeping them in their company,
1949 he attended a parade in honor of Dr. Jose Rizal in said city upon instruction of the city
educating them and instructing them in proportion to their means", while, on the other hand,
school's supervisor. From the school Dante, with other students, boarded a jeep and when the
gives them the "right to correct and punish them in moderation" (Articles 154 and 155, Spanish
same started to run, he took hold of the wheel and drove it while the driver sat on his left side.
Civil Code). The only way by which they can relieve themselves of this liability is if they prove
They have not gone far when the jeep turned turtle and two of its passengers, Amado Ticzon
that they exercised all the diligence of a good father of a family to prevent the damage(Article
and Isidore Caperiña, died as a consequence. It further appears that Delfin Capuno, father of
1903, last paragraph, Spanish Civil Code). This defendants failed to prove.
Dante, was not with his son at the time of the accident, nor did he know that his son was going
to attend a parade. He only came to know it when his son told him after the accident that he
attended the parade upon instruction of his teacher. WHEREFORE, the decision appealed from is modified in the sense that defendants Delfin
Capuno and Dante Capuno shall pay to plaintiff, jointly and severally, the sum of P2,959.00 as
damages, and the costs of action.
The only issue involved in this appeal is whether defendant Delfin Capuno can be held civilly
liable, jointly and severally with his son Dante, for damages resulting from the death of Isidoro
Caperiña caused by the negligent act of minor Dante Capuno.

The case comes under Article 1903 of the Spanish Civil Code, paragraph 1 and 5, which
provides:
 46

FIRST DIVISION On April 11, 1984, Dr. Ampil, assisted by the medical staff4 of the Medical City Hospital,
performed an anterior resection surgery on Natividad. He found that the malignancy in her
sigmoid area had spread on her left ovary, necessitating the removal of certain portions of it.
G.R. No. 126297 January 31, 2007
Thus, Dr. Ampil obtained the consent of Natividad’s husband, Enrique Agana, to permit Dr. Juan
Fuentes, respondent in G.R. No. 126467, to perform hysterectomy on her.
PROFESSIONAL SERVICES, INC., Petitioner,
vs.
After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over, completed the operation
NATIVIDAD and ENRIQUE AGANA, Respondents.
and closed the incision.

x-----------------------x
However, the operation appeared to be flawed. In the corresponding Record of Operation dated
April 11, 1984, the attending nurses entered these remarks:
G.R. No. 126467 January 31, 2007
"sponge count lacking 2
NATIVIDAD (Substituted by her children MARCELINO AGANA III, ENRIQUE AGANA, JR.,
EMMA AGANA ANDAYA, JESUS AGANA, and RAYMUND AGANA) and ENRIQUE
"announced to surgeon searched (sic) done but to no avail continue for closure."
AGANA, Petitioners,
vs.
JUAN FUENTES, Respondent. On April 24, 1984, Natividad was released from the hospital. Her hospital and medical bills,
including the doctors’ fees, amounted to P60,000.00.
x- - - - - - - - - - - - - - - - - - - -- - - - x
After a couple of days, Natividad complained of excruciating pain in her anal region. She
consulted both Dr. Ampil and Dr. Fuentes about it. They told her that the pain was the natural
G.R. No. 127590 January 31, 2007
consequence of the surgery. Dr. Ampil then recommended that she consult an oncologist to
examine the cancerous nodes which were not removed during the operation.
MIGUEL AMPIL, Petitioner,
vs.
On May 9, 1984, Natividad, accompanied by her husband, went to the United States to seek
NATIVIDAD AGANA and ENRIQUE AGANA, Respondents.
further treatment. After four months of consultations and laboratory examinations, Natividad was
told she was free of cancer. Hence, she was advised to return to the Philippines.
DECISION
On August 31, 1984, Natividad flew back to the Philippines, still suffering from pains. Two weeks
SANDOVAL-GUTIERREZ, J.: thereafter, her daughter found a piece of gauze protruding from her vagina. Upon being informed
about it, Dr. Ampil proceeded to her house where he managed to extract by hand a piece of
gauze measuring 1.5 inches in width. He then assured her that the pains would soon vanish.
Hospitals, having undertaken one of mankind’s most important and delicate endeavors, must
assume the grave responsibility of pursuing it with appropriate care. The care and service
dispensed through this high trust, however technical, complex and esoteric its character may be, Dr. Ampil’s assurance did not come true. Instead, the pains intensified, prompting Natividad to
must meet standards of responsibility commensurate with the undertaking to preserve and seek treatment at the Polymedic General Hospital. While confined there, Dr. Ramon Gutierrez
protect the health, and indeed, the very lives of those placed in the hospital’s keeping. 1 detected the presence of another foreign object in her vagina -- a foul-smelling gauze measuring
1.5 inches in width which badly infected her vaginal vault. A recto-vaginal fistula had formed in
her reproductive organs which forced stool to excrete through the vagina. Another surgical
Assailed in these three consolidated petitions for review on certiorari is the Court of Appeals’ operation was needed to remedy the damage. Thus, in October 1984, Natividad underwent
Decision2 dated September 6, 1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198
another surgery.
affirming with modification the Decision3dated March 17, 1993 of the Regional Trial Court (RTC),
Branch 96, Quezon City in Civil Case No. Q-43322 and nullifying its Order dated September 21,
1993. On November 12, 1984, Natividad and her husband filed with the RTC, Branch 96, Quezon City
a complaint for damages against the Professional Services, Inc. (PSI), owner of the Medical City
Hospital, Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322. They alleged that the
The facts, as culled from the records, are: latter are liable for negligence for leaving two pieces of gauze inside Natividad’s body and
malpractice for concealing their acts of negligence.
On April 4, 1984, Natividad Agana was rushed to the Medical City General Hospital (Medical
City Hospital) because of difficulty of bowel movement and bloody anal discharge. After a series Meanwhile, Enrique Agana also filed with the Professional Regulation Commission (PRC) an
of medical examinations, Dr. Miguel Ampil, petitioner in G.R. No. 127590, diagnosed her to be
administrative complaint for gross negligence and malpractice against Dr. Ampil and Dr.
suffering from "cancer of the sigmoid." Fuentes, docketed as Administrative Case No. 1690. The PRC Board of Medicine heard the
 47
case only with respect to Dr. Fuentes because it failed to acquire jurisdiction over Dr. Ampil who
was then in the United States.
On February 16, 1986, pending the outcome of the above cases, Natividad died and was duly
substituted by her above-named children (the Aganas).
On March 17, 1993, the RTC rendered its Decision in favor of the Aganas, finding PSI, Dr. Ampil
and Dr. Fuentes liable for negligence and malpractice, the decretal part of which reads:
WHEREFORE, judgment is hereby rendered for the plaintiffs ordering the defendants
PROFESSIONAL SERVICES, INC., DR. MIGUEL AMPIL and DR. JUAN FUENTES to pay to
the plaintiffs, jointly and severally, except in respect of the award for exemplary damages and
the interest thereon which are the liabilities of defendants Dr. Ampil and Dr. Fuentes only, as
follows:
1. As actual damages, the following amounts:
a. The equivalent in Philippine Currency of the total of US$19,900.00 at the
rate of P21.60-US$1.00, as reimbursement of actual expenses incurred in
the United States of America;
b. The sum of P4,800.00 as travel taxes of plaintiffs and their physician
daughter;
c. The total sum of P45,802.50, representing the cost of hospitalization at
Polymedic Hospital, medical fees, and cost of the saline solution;
2. As moral damages, the sum of P2,000,000.00;
3. As exemplary damages, the sum of P300,000.00;
4. As attorney’s fees, the sum of P250,000.00;
5. Legal interest on items 1 (a), (b), and (c); 2; and 3 hereinabove, from date of filing of
the complaint until full payment; and
6. Costs of suit.
SO ORDERED.
Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the Court of Appeals,
docketed as CA-G.R. CV No. 42062.
Incidentally, on April 3, 1993, the Aganas filed with the RTC a motion for a partial execution of its
Decision, which was granted in an Order dated May 11, 1993. Thereafter, the sheriff levied upon
certain properties of Dr. Ampil and sold them for P451,275.00 and delivered the amount to the
Aganas.
Following their receipt of the money, the Aganas entered into an agreement with PSI and Dr.
Fuentes to indefinitely suspend any further execution of the RTC Decision. However, not long
thereafter, the Aganas again filed a motion for an alias writ of execution against the properties of
PSI and Dr. Fuentes. On September 21, 1993, the RTC granted the motion and issued the
corresponding writ, prompting Dr. Fuentes to file with the Court of Appeals a petition for certiorari
and prohibition, with prayer for preliminary injunction, docketed as CA-G.R. SP No. 32198.
During its pendency, the Court of Appeals issued a Resolution5 dated October 29, 1993 granting
Dr. Fuentes’ prayer for injunctive relief.
On January 24, 1994, CA-G.R. SP No. 32198 was consolidated with CA-G.R. CV No. 42062.
Meanwhile, on January 23, 1995, the PRC Board of Medicine rendered its Decision6 in
Administrative Case No. 1690 dismissing the case against Dr. Fuentes. The Board held that the
prosecution failed to show that Dr. Fuentes was the one who left the two pieces of gauze inside
Natividad’s body; and that he concealed such fact from Natividad.
On September 6, 1996, the Court of Appeals rendered its Decision jointly disposing of CA-G.R.
CV No. 42062 and CA-G.R. SP No. 32198, thus:
WHEREFORE, except for the modification that the case against defendant-appellant Dr. Juan
Fuentes is hereby DISMISSED, and with the pronouncement that defendant-appellant Dr.
Miguel Ampil is liable to reimburse defendant-appellant Professional Services, Inc., whatever
amount the latter will pay or had paid to the plaintiffs-appellees, the decision appealed from is
hereby AFFIRMED and the instant appeal DISMISSED.
Concomitant with the above, the petition for certiorari and prohibition filed by herein defendant-
appellant Dr. Juan Fuentes in CA-G.R. SP No. 32198 is hereby GRANTED and the challenged
order of the respondent judge dated September 21, 1993, as well as the alias writ of execution
issued pursuant thereto are hereby NULLIFIED and SET ASIDE. The bond posted by the
petitioner in connection with the writ of preliminary injunction issued by this Court on November
29, 1993 is hereby cancelled.
Costs against defendants-appellants Dr. Miguel Ampil and Professional Services, Inc.
SO ORDERED.
Only Dr. Ampil filed a motion for reconsideration, but it was denied in a Resolution7 dated
December 19, 1996.
Hence, the instant consolidated petitions.
In G.R. No. 126297, PSI alleged in its petition that the Court of Appeals erred in holding that: (1)
it is estopped from raising the defense that Dr. Ampil is not its employee; (2) it is solidarily liable
with Dr. Ampil; and (3) it is not entitled to its counterclaim against the Aganas. PSI contends that
Dr. Ampil is not its employee, but a mere consultant or independent contractor. As such, he
alone should answer for his negligence.
In G.R. No. 126467, the Aganas maintain that the Court of Appeals erred in finding that Dr.
Fuentes is not guilty of negligence or medical malpractice, invoking the doctrine of res ipsa
 48
loquitur. They contend that the pieces of gauze are prima facie proofs that the operating
surgeons have been negligent.
Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court of Appeals erred in finding him
liable for negligence and malpractice sans evidence that he left the two pieces of gauze in
Natividad’s vagina. He pointed to other probable causes, such as: (1) it was Dr. Fuentes who
used gauzes in performing the hysterectomy; (2) the attending nurses’ failure to properly count
the gauzes used during surgery; and (3) the medical intervention of the American doctors who
examined Natividad in the United States of America.
For our resolution are these three vital issues: first, whether the Court of Appeals erred in
holding Dr. Ampil liable for negligence and malpractice; second, whether the Court of Appeals
erred in absolving Dr. Fuentes of any liability; and third, whether PSI may be held solidarily liable
for the negligence of Dr. Ampil.
I - G.R. No. 127590
Whether the Court of Appeals Erred in Holding Dr. Ampil
Liable for Negligence and Malpractice.
Dr. Ampil, in an attempt to absolve himself, gears the Court’s attention to other possible causes
of Natividad’s detriment. He argues that the Court should not discount either of the following
possibilities: first, Dr. Fuentes left the gauzes in Natividad’s body after performing hysterectomy;
second, the attending nurses erred in counting the gauzes; and third, the American doctors were
the ones who placed the gauzes in Natividad’s body.
Dr. Ampil’s arguments are purely conjectural and without basis. Records show that he did not
present any evidence to prove that the American doctors were the ones who put or left the
gauzes in Natividad’s body. Neither did he submit evidence to rebut the correctness of the
record of operation, particularly the number of gauzes used. As to the alleged negligence of Dr.
Fuentes, we are mindful that Dr. Ampil examined his (Dr. Fuentes’) work and found it in order.
The glaring truth is that all the major circumstances, taken together, as specified by the Court of
Appeals, directly point to Dr. Ampil as the negligent party, thus:
First, it is not disputed that the surgeons used gauzes as sponges to control the
bleeding of the patient during the surgical operation.
Second, immediately after the operation, the nurses who assisted in the surgery noted
in their report that the ‘sponge count (was) lacking 2’; that such anomaly was
‘announced to surgeon’ and that a ‘search was done but to no avail’ prompting Dr.
Ampil to ‘continue for closure’ x x x.
Third, after the operation, two (2) gauzes were extracted from the same spot of the
body of Mrs. Agana where the surgery was performed.
An operation requiring the placing of sponges in the incision is not complete until the sponges
are properly removed, and it is settled that the leaving of sponges or other foreign substances in
the wound after the incision has been closed is at least prima facie negligence by the operating
surgeon.8 To put it simply, such act is considered so inconsistent with due care as to raise an
inference of negligence. There are even legions of authorities to the effect that such act is
negligence per se.9
Of course, the Court is not blind to the reality that there are times when danger to a patient’s life
precludes a surgeon from further searching missing sponges or foreign objects left in the body.
But this does not leave him free from any obligation. Even if it has been shown that a surgeon
was required by the urgent necessities of the case to leave a sponge in his patient’s abdomen,
because of the dangers attendant upon delay, still, it is his legal duty to so inform his patient
within a reasonable time thereafter by advising her of what he had been compelled to do. This is
in order that she might seek relief from the effects of the foreign object left in her body as her
condition might permit. The ruling in Smith v. Zeagler10 is explicit, thus:
The removal of all sponges used is part of a surgical operation, and when a physician or
surgeon fails to remove a sponge he has placed in his patient’s body that should be removed as
part of the operation, he thereby leaves his operation uncompleted and creates a new condition
which imposes upon him the legal duty of calling the new condition to his patient’s attention, and
endeavoring with the means he has at hand to minimize and avoid untoward results likely to
ensue therefrom.
Here, Dr. Ampil did not inform Natividad about the missing two pieces of gauze. Worse, he even
misled her that the pain she was experiencing was the ordinary consequence of her operation.
Had he been more candid, Natividad could have taken the immediate and appropriate medical
remedy to remove the gauzes from her body. To our mind, what was initially an act of
negligence by Dr. Ampil has ripened into a deliberate wrongful act of deceiving his patient.
This is a clear case of medical malpractice or more appropriately, medical negligence. To
successfully pursue this kind of case, a patient must only prove that a health care provider either
failed to do something which a reasonably prudent health care provider would have done, or that
he did something that a reasonably prudent provider would not have done; and that failure or
action caused injury to the patient.11 Simply put, the elements are duty, breach, injury and
proximate causation. Dr, Ampil, as the lead surgeon, had the duty to remove all foreign objects,
such as gauzes, from Natividad’s body before closure of the incision. When he failed to do so, it
was his duty to inform Natividad about it. Dr. Ampil breached both duties. Such breach caused
injury to Natividad, necessitating her further examination by American doctors and another
surgery. That Dr. Ampil’s negligence is the proximate cause12 of Natividad’s injury could be
traced from his act of closing the incision despite the information given by the attending nurses
that two pieces of gauze were still missing. That they were later on extracted from Natividad’s
vagina established the causal link between Dr. Ampil’s negligence and the injury. And what
further aggravated such injury was his deliberate concealment of the missing gauzes from the
knowledge of Natividad and her family.
II - G.R. No. 126467
Whether the Court of Appeals Erred in Absolving
Dr. Fuentes of any Liability
The Aganas assailed the dismissal by the trial court of the case against Dr. Fuentes on the
ground that it is contrary to the doctrine of res ipsa loquitur. According to them, the fact that the
 49

two pieces of gauze were left inside Natividad’s body is a prima facie evidence of Dr. Fuentes’ III - G.R. No. 126297
negligence.
Whether PSI Is Liable for the Negligence of Dr. Ampil
We are not convinced.
The third issue necessitates a glimpse at the historical development of hospitals and the
Literally, res ipsa loquitur means "the thing speaks for itself." It is the rule that the fact of the resulting theories concerning their liability for the negligence of physicians.
occurrence of an injury, taken with the surrounding circumstances, may permit an inference or
raise a presumption of negligence, or make out a plaintiff’s prima facie case, and present a
Until the mid-nineteenth century, hospitals were generally charitable institutions, providing
question of fact for defendant to meet with an explanation.13 Stated differently, where the thing
medical services to the lowest classes of society, without regard for a patient’s ability to
which caused the injury, without the fault of the injured, is under the exclusive control of the
pay.18 Those who could afford medical treatment were usually treated at home by their
defendant and the injury is such that it should not have occurred if he, having such control used
doctors.19 However, the days of house calls and philanthropic health care are over. The modern
proper care, it affords reasonable evidence, in the absence of explanation that the injury arose
health care industry continues to distance itself from its charitable past and has experienced a
from the defendant’s want of care, and the burden of proof is shifted to him to establish that he
significant conversion from a not-for-profit health care to for-profit hospital businesses.
has observed due care and diligence.14
Consequently, significant changes in health law have accompanied the business-related
changes in the hospital industry. One important legal change is an increase in hospital liability
From the foregoing statements of the rule, the requisites for the applicability of the doctrine of for medical malpractice. Many courts now allow claims for hospital vicarious liability under the
res ipsa loquitur are: (1) the occurrence of an injury; (2) the thing which caused the injury was theories of respondeat superior, apparent authority, ostensible authority, or agency by
under the control and management of the defendant; (3) the occurrence was such that in the estoppel. 20
ordinary course of things, would not have happened if those who had control or management
used proper care; and (4) the absence of explanation by the defendant. Of the foregoing
In this jurisdiction, the statute governing liability for negligent acts is Article 2176 of the Civil
requisites, the most instrumental is the "control and management of the thing which caused the
Code, which reads:
injury."15

Art. 2176. Whoever by act or omission causes damage to another, there being fault or
We find the element of "control and management of the thing which caused the injury" to be
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
wanting. Hence, the doctrine of res ipsa loquitur will not lie.
existing contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.
It was duly established that Dr. Ampil was the lead surgeon during the operation of Natividad. He
requested the assistance of Dr. Fuentes only to perform hysterectomy when he (Dr. Ampil)
A derivative of this provision is Article 2180, the rule governing vicarious liability under the
found that the malignancy in her sigmoid area had spread to her left ovary. Dr. Fuentes
doctrine of respondeat superior, thus:
performed the surgery and thereafter reported and showed his work to Dr. Ampil. The latter
examined it and finding everything to be in order, allowed Dr. Fuentes to leave the operating
room. Dr. Ampil then resumed operating on Natividad. He was about to finish the procedure ART. 2180. The obligation imposed by Article 2176 is demandable not only for one’s own acts or
when the attending nurses informed him that two pieces of gauze were missing. A "diligent omissions, but also for those of persons for whom one is responsible.
search" was conducted, but the misplaced gauzes were not found. Dr. Ampil then directed that
the incision be closed. During this entire period, Dr. Fuentes was no longer in the operating room
and had, in fact, left the hospital. x x x x x x

Under the "Captain of the Ship" rule, the operating surgeon is the person in complete charge of The owners and managers of an establishment or enterprise are likewise responsible for
the surgery room and all personnel connected with the operation. Their duty is to obey his damages caused by their employees in the service of the branches in which the latter are
employed or on the occasion of their functions.
orders.16 As stated before, Dr. Ampil was the lead surgeon. In other words, he was the "Captain
of the Ship." That he discharged such role is evident from his following conduct: (1) calling Dr.
Fuentes to perform a hysterectomy; (2) examining the work of Dr. Fuentes and finding it in order; Employers shall be liable for the damages caused by their employees and household helpers
(3) granting Dr. Fuentes’ permission to leave; and (4) ordering the closure of the incision. To our acting within the scope of their assigned tasks even though the former are not engaged in any
mind, it was this act of ordering the closure of the incision notwithstanding that two pieces of business or industry.
gauze remained unaccounted for, that caused injury to Natividad’s body. Clearly, the control and
management of the thing which caused the injury was in the hands of Dr. Ampil, not Dr. Fuentes.
x x x x x x

In this jurisdiction, res ipsa loquitur is not a rule of substantive law, hence, does not per se create
or constitute an independent or separate ground of liability, being a mere evidentiary rule. 17 In The responsibility treated of in this article shall cease when the persons herein mentioned prove
other words, mere invocation and application of the doctrine does not dispense with the that they observed all the diligence of a good father of a family to prevent damage.
requirement of proof of negligence. Here, the negligence was proven to have been committed by
Dr. Ampil and not by Dr. Fuentes.
 50
A prominent civilist commented that professionals engaged by an employer, such as physicians,
dentists, and pharmacists, are not "employees" under this article because the manner in which
they perform their work is not within the control of the latter (employer). In other words,
professionals are considered personally liable for the fault or negligence they commit in the
discharge of their duties, and their employer cannot be held liable for such fault or negligence. In
the context of the present case, "a hospital cannot be held liable for the fault or negligence of a
physician or surgeon in the treatment or operation of patients." 21
The foregoing view is grounded on the traditional notion that the professional status and the very
nature of the physician’s calling preclude him from being classed as an agent or employee of a
hospital, whenever he acts in a professional capacity.22 It has been said that medical practice
strictly involves highly developed and specialized knowledge,23 such that physicians are
generally free to exercise their own skill and judgment in rendering medical services sans
interference.24 Hence, when a doctor practices medicine in a hospital setting, the hospital and its
employees are deemed to subserve him in his ministrations to the patient and his actions are of
his own responsibility.25
The case of Schloendorff v. Society of New York Hospital26 was then considered an authority for
this view. The "Schloendorff doctrine" regards a physician, even if employed by a hospital, as an
independent contractor because of the skill he exercises and the lack of control exerted over his
work. Under this doctrine, hospitals are exempt from the application of the respondeat superior
principle for fault or negligence committed by physicians in the discharge of their profession.
However, the efficacy of the foregoing doctrine has weakened with the significant developments
in medical care. Courts came to realize that modern hospitals are increasingly taking active role
in supplying and regulating medical care to patients. No longer were a hospital’s functions
limited to furnishing room, food, facilities for treatment and operation, and attendants for its
patients. Thus, in Bing v. Thunig,27 the New York Court of Appeals deviated from the
Schloendorff doctrine, noting that modern hospitals actually do far more than provide facilities for
treatment. Rather, they regularly employ, on a salaried basis, a large staff of physicians, interns,
nurses, administrative and manual workers. They charge patients for medical care and
treatment, even collecting for such services through legal action, if necessary. The court then
concluded that there is no reason to exempt hospitals from the universal rule of respondeat
superior.
In our shores, the nature of the relationship between the hospital and the physicians is rendered
inconsequential in view of our categorical pronouncement in Ramos v. Court of Appeals 28 that
for purposes of apportioning responsibility in medical negligence cases, an employer-employee
relationship in effect exists between hospitals and their attending and visiting physicians. This
Court held:
"We now discuss the responsibility of the hospital in this particular incident. The unique practice
(among private hospitals) of filling up specialist staff with attending and visiting "consultants,"
who are allegedly not hospital employees, presents problems in apportioning responsibility for
negligence in medical malpractice cases. However, the difficulty is more apparent than real.
In the first place, hospitals exercise significant control in the hiring and firing of consultants and
in the conduct of their work within the hospital premises. Doctors who apply for ‘consultant’ slots,
visiting or attending, are required to submit proof of completion of residency, their educational
qualifications, generally, evidence of accreditation by the appropriate board (diplomate),
evidence of fellowship in most cases, and references. These requirements are carefully
scrutinized by members of the hospital administration or by a review committee set up by the
hospital who either accept or reject the application. x x x.
After a physician is accepted, either as a visiting or attending consultant, he is normally required
to attend clinico-pathological conferences, conduct bedside rounds for clerks, interns and
residents, moderate grand rounds and patient audits and perform other tasks and
responsibilities, for the privilege of being able to maintain a clinic in the hospital, and/or for the
privilege of admitting patients into the hospital. In addition to these, the physician’s performance
as a specialist is generally evaluated by a peer review committee on the basis of mortality and
morbidity statistics, and feedback from patients, nurses, interns and residents. A consultant
remiss in his duties, or a consultant who regularly falls short of the minimum standards
acceptable to the hospital or its peer review committee, is normally politely terminated.
In other words, private hospitals, hire, fire and exercise real control over their attending and
visiting ‘consultant’ staff. While ‘consultants’ are not, technically employees, x x x, the control
exercised, the hiring, and the right to terminate consultants all fulfill the important hallmarks of an
employer-employee relationship, with the exception of the payment of wages. In assessing
whether such a relationship in fact exists, the control test is determining. Accordingly, on the
basis of the foregoing, we rule that for the purpose of allocating responsibility in medical
negligence cases, an employer-employee relationship in effect exists between hospitals and
their attending and visiting physicians. "
But the Ramos pronouncement is not our only basis in sustaining PSI’s liability. Its liability is also
anchored upon the agency principle of apparent authority or agency by estoppel and the
doctrine of corporate negligence which have gained acceptance in the determination of a
hospital’s liability for negligent acts of health professionals. The present case serves as a perfect
platform to test the applicability of these doctrines, thus, enriching our jurisprudence.
Apparent authority, or what is sometimes referred to as the "holding
out" theory, or doctrine of ostensible agency or agency by estoppel,29 has its origin from the law
of agency. It imposes liability, not as the result of the reality of a contractual relationship, but
rather because of the actions of a principal or an employer in somehow misleading the public
into believing that the relationship or the authority exists.30 The concept is essentially one of
estoppel and has been explained in this manner:
"The principal is bound by the acts of his agent with the apparent authority which he knowingly
permits the agent to assume, or which he holds the agent out to the public as possessing. The
question in every case is whether the principal has by his voluntary act placed the agent in such
a situation that a person of ordinary prudence, conversant with business usages and the nature
of the particular business, is justified in presuming that such agent has authority to perform the
particular act in question.31
The applicability of apparent authority in the field of hospital liability was upheld long time ago in
Irving v. Doctor Hospital of Lake Worth, Inc.32 There, it was explicitly stated that "there does not
appear to be any rational basis for excluding the concept of apparent authority from the field of
hospital liability." Thus, in cases where it can be shown that a hospital, by its actions, has held
out a particular physician as its agent and/or employee and that a patient has accepted
treatment from that physician in the reasonable belief that it is being rendered in behalf of the
hospital, then the hospital will be liable for the physician’s negligence.
 51
Our jurisdiction recognizes the concept of an agency by implication or estoppel. Article 1869 of
the Civil Code reads:
ART. 1869. Agency may be express, or implied from the acts of the principal, from his silence or
lack of action, or his failure to repudiate the agency, knowing that another person is acting on his
behalf without authority.
In this case, PSI publicly displays in the lobby of the Medical City Hospital the names and
specializations of the physicians associated or accredited by it, including those of Dr. Ampil and
Dr. Fuentes. We concur with the Court of Appeals’ conclusion that it "is now estopped from
passing all the blame to the physicians whose names it proudly paraded in the public directory
leading the public to believe that it vouched for their skill and competence." Indeed, PSI’s act is
tantamount to holding out to the public that Medical City Hospital, through its accredited
physicians, offers quality health care services. By accrediting Dr. Ampil and Dr. Fuentes and
publicly advertising their qualifications, the hospital created the impression that they were its
agents, authorized to perform medical or surgical services for its patients. As expected, these
patients, Natividad being one of them, accepted the services on the reasonable belief that such
were being rendered by the hospital or its employees, agents, or servants. The trial court
correctly pointed out:
x x x regardless of the education and status in life of the patient, he ought not be burdened with
the defense of absence of employer-employee relationship between the hospital and the
independent physician whose name and competence are certainly certified to the general public
by the hospital’s act of listing him and his specialty in its lobby directory, as in the case herein.
The high costs of today’s medical and health care should at least exact on the hospital greater, if
not broader, legal responsibility for the conduct of treatment and surgery within its facility by its
accredited physician or surgeon, regardless of whether he is independent or employed." 33
The wisdom of the foregoing ratiocination is easy to discern. Corporate entities, like PSI, are
capable of acting only through other individuals, such as physicians. If these accredited
physicians do their job well, the hospital succeeds in its mission of offering quality medical
services and thus profits financially. Logically, where negligence mars the quality of its services,
the hospital should not be allowed to escape liability for the acts of its ostensible agents.
We now proceed to the doctrine of corporate negligence or corporate responsibility.
One allegation in the complaint in Civil Case No. Q-43332 for negligence and malpractice is that
PSI as owner, operator and manager of Medical City Hospital, "did not perform the necessary
supervision nor exercise diligent efforts in the supervision of Drs. Ampil and Fuentes and its
nursing staff, resident doctors, and medical interns who assisted Drs. Ampil and Fuentes in the
performance of their duties as surgeons."34 Premised on the doctrine of corporate negligence,
the trial court held that PSI is directly liable for such breach of duty.
We agree with the trial court.
Recent years have seen the doctrine of corporate negligence as the judicial answer to the
problem of allocating hospital’s liability for the negligent acts of health practitioners, absent facts
to support the application of respondeat superior or apparent authority. Its formulation proceeds
from the judiciary’s acknowledgment that in these modern times, the duty of providing quality
medical service is no longer the sole prerogative and responsibility of the physician. The modern
hospitals have changed structure. Hospitals now tend to organize a highly professional medical
staff whose competence and performance need to be monitored by the hospitals commensurate
with their inherent responsibility to provide quality medical care.35
The doctrine has its genesis in Darling v. Charleston Community Hospital. 36 There, the Supreme
Court of Illinois held that "the jury could have found a hospital negligent, inter alia, in failing to
have a sufficient number of trained nurses attending the patient; failing to require a consultation
with or examination by members of the hospital staff; and failing to review the treatment
rendered to the patient." On the basis of Darling, other jurisdictions held that a hospital’s
corporate negligence extends to permitting a physician known to be incompetent to practice at
the hospital.37 With the passage of time, more duties were expected from hospitals, among
them: (1) the use of reasonable care in the maintenance of safe and adequate facilities and
equipment; (2) the selection and retention of competent physicians; (3) the overseeing or
supervision of all persons who practice medicine within its walls; and (4) the formulation,
adoption and enforcement of adequate rules and policies that ensure quality care for its
patients.38 Thus, in Tucson Medical Center, Inc. v. Misevich,39 it was held that a hospital,
following the doctrine of corporate responsibility, has the duty to see that it meets the standards
of responsibilities for the care of patients. Such duty includes the proper supervision of the
members of its medical staff. And in Bost v. Riley,40 the court concluded that a patient who
enters a hospital does so with the reasonable expectation that it will attempt to cure him. The
hospital accordingly has the duty to make a reasonable effort to monitor and oversee the
treatment prescribed and administered by the physicians practicing in its premises.
In the present case, it was duly established that PSI operates the Medical City Hospital for the
purpose and under the concept of providing comprehensive medical services to the public.
Accordingly, it has the duty to exercise reasonable care to protect from harm all patients
admitted into its facility for medical treatment. Unfortunately, PSI failed to perform such duty. The
findings of the trial court are convincing, thus:
x x x PSI’s liability is traceable to its failure to conduct an investigation of the matter reported in
the nota bene of the count nurse. Such failure established PSI’s part in the dark conspiracy of
silence and concealment about the gauzes. Ethical considerations, if not also legal, dictated the
holding of an immediate inquiry into the events, if not for the benefit of the patient to whom the
duty is primarily owed, then in the interest of arriving at the truth. The Court cannot accept that
the medical and the healing professions, through their members like defendant surgeons, and
their institutions like PSI’s hospital facility, can callously turn their backs on and disregard even a
mere probability of mistake or negligence by refusing or failing to investigate a report of such
seriousness as the one in Natividad’s case.
It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad with the assistance of
the Medical City Hospital’s staff, composed of resident doctors, nurses, and interns. As such, it
is reasonable to conclude that PSI, as the operator of the hospital, has actual or constructive
knowledge of the procedures carried out, particularly the report of the attending nurses that the
two pieces of gauze were missing. In Fridena v. Evans,41 it was held that a corporation is bound
by the knowledge acquired by or notice given to its agents or officers within the scope of their
authority and in reference to a matter to which their authority extends. This means that the
knowledge of any of the staff of Medical City Hospital constitutes knowledge of PSI. Now, the
failure of PSI, despite the attending nurses’ report, to investigate and inform Natividad regarding
the missing gauzes amounts to callous negligence. Not only did PSI breach its duties to oversee
or supervise all persons who practice medicine within its walls, it also failed to take an active
step in fixing the negligence committed. This renders PSI, not only vicariously liable for the
negligence of Dr. Ampil under Article 2180 of the Civil Code, but also directly liable for its own
negligence under Article 2176. In Fridena, the Supreme Court of Arizona held:
 52

x x x In recent years, however, the duty of care owed to the patient by the hospital has
expanded. The emerging trend is to hold the hospital responsible where the hospital has failed
to monitor and review medical services being provided within its walls. See Kahn Hospital
Malpractice Prevention, 27 De Paul . Rev. 23 (1977).

Among the cases indicative of the ‘emerging trend’ is Purcell v. Zimbelman, 18 Ariz. App. 75,500
P. 2d 335 (1972). In Purcell, the hospital argued that it could not be held liable for the
malpractice of a medical practitioner because he was an independent contractor within the
hospital. The Court of Appeals pointed out that the hospital had created a professional staff
whose competence and performance was to be monitored and reviewed by the governing body
of the hospital, and the court held that a hospital would be negligent where it had knowledge or
reason to believe that a doctor using the facilities was employing a method of treatment or care
which fell below the recognized standard of care.

Subsequent to the Purcell decision, the Arizona Court of Appeals held that a hospital has certain
inherent responsibilities regarding the quality of medical care furnished to patients within its walls
and it must meet the standards of responsibility commensurate with this undertaking. Beeck v.
Tucson General Hospital, 18 Ariz. App. 165, 500 P. 2d 1153 (1972). This court has confirmed
the rulings of the Court of Appeals that a hospital has the duty of supervising the competence of
the doctors on its staff. x x x.

x x x x x x

In the amended complaint, the plaintiffs did plead that the operation was performed at the
hospital with its knowledge, aid, and assistance, and that the negligence of the defendants was
the proximate cause of the patient’s injuries. We find that such general allegations of negligence,
along with the evidence produced at the trial of this case, are sufficient to support the hospital’s
liability based on the theory of negligent supervision."

Anent the corollary issue of whether PSI is solidarily liable with Dr. Ampil for damages, let it be
emphasized that PSI, apart from a general denial of its responsibility, failed to adduce evidence
showing that it exercised the diligence of a good father of a family in the accreditation and
supervision of the latter. In neglecting to offer such proof, PSI failed to discharge its burden
under the last paragraph of Article 2180 cited earlier, and, therefore, must be adjudged solidarily
liable with Dr. Ampil. Moreover, as we have discussed, PSI is also directly liable to the Aganas.

One final word. Once a physician undertakes the treatment and care of a patient, the law
imposes on him certain obligations. In order to escape liability, he must possess that reasonable
degree of learning, skill and experience required by his profession. At the same time, he must
apply reasonable care and diligence in the exercise of his skill and the application of his
knowledge, and exert his best judgment.

WHEREFORE, we DENY all the petitions and AFFIRM the challenged Decision of the Court of
Appeals in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198.

Costs against petitioners PSI and Dr. Miguel Ampil.

SO ORDERED.
 53

(a) for medical negligence;

Professional Services Inc. (PSI) v. Agana, G.R. No. 126297, 31 January 2007.

FACTS: (b) under the “captain of the ship doctrine”;

Natividad Agana was rushed to the Medical City General Hospital (Medical City Hospital)
because of difficulty of bowel movement and bloody anal discharge. After a series of medical
examinations, Dr. Miguel Ampil diagnosed her to be suffering from “cancer of the sigmoid.” Dr.
(3) Dr.Fuentes, under the doctrine of res ipsa loquitor;
Ampil, assisted by the medical staff of the Medical City Hospital, performed an anterior resection
surgery on Natividad. He found that the malignancy in her sigmoid area had spread on her left
ovary, necessitating the removal of certain portions of it. Thus, Dr. Ampil obtained the consent of
Natividad’s husband, Enrique Agana, to permit Dr. Juan Fuentes, respondent in G.R. No.
126467, to perform hysterectomy on her. Thereafter, Dr. Ampil took over, completed the
operation and closed the incision. However, based on the record of the hospital, the attending HELD:
nurses indicated nota bene that 2 sponges were missing. The same was reported to Dr. Ampil
but were not found after “diligent seach”.

After couple of days, Natividad complained of excruciating pain in her anal region. She consulted (1)
both Dr. Ampil and Dr. Fuentes about it. They told her that the pain was the natural
consequence of the surgery. Dr. Ampil then recommended that she consult an oncologist to
examine the cancerous nodes which were not removed during the operation. Natividad went to
the United States for four months but she was only declared free of cancer. In Natividad’s return
to the Philippines, her daughter found a piece of gauze protruding from her vagina. Upon being (a) YES.
informed about it, Dr. Ampil proceeded to her house where he managed to extract by hand a
piece of gauze measuring 1.5 inches in width. He then assured her that the pains would soon
vanish. But instead the pains intensified, prompting Natividad to seek treatment at the Polymedic
General Hospital. While confined there, Dr. Ramon Gutierrez detected the presence of another
foreign object in her vagina — a foul-smelling gauze measuring 1.5 inches in width which badly [P]rivate hospitals, hire, fire and exercise real control over their attending and visiting ‘consultant’
infected her vaginal vault. A recto-vaginal fistula had formed in her reproductive organs which staff. While ‘consultants’ are not, technically employees, x x x, the control exercised, the hiring,
forced stool to excrete through the vagina. Natividad underwent another surgical operation to and the right to terminate consultants all fulfill the important hallmarks of an employer-employee
remedy the damage. Civil and administrative complaints, for damages and gross negligence relationship, with the exception of the payment of wages. In assessing whether such a
respectively, were filed against Professional Services Inc., owner of Medical City Hospital, Dr. relationship in fact exists, the control test is determining. Accordingly, on the basis of the
Ampil and Dr. Fuentes. foregoing, we rule that for the purpose of allocating responsibility in medical negligence cases,
an employer-employee relationship in effect exists between hospitals and their attending and
ISSUE(S): visiting physicians.

Are the following liable? (b) YES.

(1) Professional Services Inc., based on Apparent authority, or what is sometimes referred to as the “holding out” theory, or doctrine of
ostensible agency or agency by estoppel, has its origin from the law of agency. It imposes
liability, not as the result of the reality of a contractual relationship, but rather because of the
(a) “employer-employee relationship”; actions of a principal or an employer in somehow misleading the public into believing that the
relationship or the authority exists. xxx In this case, PSI publicly displays in the lobby of the
(b) “doctrine of apparent authority”; Medical City Hospital the names and specializations of the physicians associated or accredited
by it, including those of Dr. Ampil and Dr. Fuentes. We concur with the Court of Appeals’
conclusion that it “is now estopped from passing all the blame to the physicians whose names it
(c) “corporate negligence”; proudly paraded in the public directory leading the public to believe that it vouched for their skill
and competence.” Indeed, PSI’s act is tantamount to holding out to the public that Medical City
(2) Dr. Ampil, Hospital, through its accredited physicians, offers quality health care services. By accrediting Dr.
Ampil and Dr. Fuentes and publicly advertising their qualifications, the hospital created the
impression that they were its agents, authorized to perform medical or surgical services for its
 54

patients. As expected, these patients, Natividad being one of them, accepted the services on the The requisites for the applicability of the doctrine of res ipsa loquitur are: (1) the occurrence of
reasonable belief that such were being rendered by the hospital or its employees, agents, or an injury; (2) the thing which caused the injury was under the control and management of the
servants. defendant; (3) the occurrence was such that in the ordinary course of things, would not have
happened if those who had control or management used proper care; and (4) the absence of
explanation by the defendant. Of the foregoing requisites, the most instrumental is the “control
(c) YES.
and management of the thing which caused the injury.”

Hospital’s corporate negligence extends to permitting a physician known to be incompetent to

practice at the hospital. xxx [A] patient who enters a hospital does so with the reasonable
expectation that it will attempt to cure him. The hospital accordingly has the duty to make a
reasonable effort to monitor and oversee the treatment prescribed and administered by the
physicians practicing in its premises. In the present case, it was duly established that PSI
operates the Medical City Hospital for the purpose and under the concept of providing
comprehensive medical services to the public. Accordingly, it has the duty to exercise
reasonable care to protect from harm all patients admitted into its facility for medical treatment.
Unfortunately, PSI failed to perform such duty.
(2)
(a) YES.
We find the element of “control and management of the thing which caused the injury” to be
wanting. Hence, the doctrine of res ipsa loquitur will not lie.
It was duly established that Dr. Ampil was the lead surgeon during the operation of Natividad. He
requested the assistance of Dr. Fuentes only to perform hysterectomy when he (Dr. Ampil)
found that the malignancy in her sigmoid area had spread to her left ovary. Dr. Fuentes
performed the surgery and thereafter reported and showed his work to Dr. Ampil. The latter
examined it and finding everything to be in order, allowed Dr. Fuentes to leave the operating
room. Dr. Ampil then resumed operating on Natividad. He was about to finish the procedure
when the attending nurses informed him that two pieces of gauze were missing. A “diligent
search” was conducted, but the misplaced gauzes were not found. Dr. Ampil then directed that
the incision be closed. During this entire period, Dr. Fuentes was no longer in the operating room
and had, in fact, left the hospital.

This is a clear case of medical malpractice or more appropriately, medical negligence. To

successfully pursue this kind of case, a patient must only prove that a health care provider either
failed to do something which a reasonably prudent health care provider would have done, or that
he did something that a reasonably prudent provider would not have done; and that failure or
action caused injury to the patient. Simply put, the elements are duty, breach, injury and
proximate causation. Dr, Ampil, as the lead surgeon, had the duty to remove all foreign objects,
such as gauzes, from Natividad’s body before closure of the incision. When he failed to do so, it
was his duty to inform Natividad about it. Dr. Ampil breached both duties. Such breach caused
injury to Natividad, necessitating her further examination by American doctors and another
surgery. That Dr. Ampil’s negligence is the proximate cause of Natividad’s injury could be traced
from his act of closing the incision despite the information given by the attending nurses that two
pieces of gauze were still missing. That they were later on extracted from Natividad’s vagina
established the causal link between Dr. Ampil’s negligence and the injury. And what further
aggravated such injury was his deliberate concealment of the missing gauzes from the
knowledge of Natividad and her family.

(b) YES.

Under the “Captain of the Ship” rule, the operating surgeon is the person in complete charge of
the surgery room and all personnel connected with the operation. Their duty is to obey his
orders. As stated before, Dr. Ampil was the lead surgeon. In other words, he was the “Captain of
the Ship.” That he discharged such role is evident from his following conduct: (1) calling Dr.
Fuentes to perform a hysterectomy; (2) examining the work of Dr. Fuentes and finding it in order;
(3) granting Dr. Fuentes’ permission to leave; and (4) ordering the closure of the incision. To our
mind, it was this act of ordering the closure of the incision notwithstanding that two pieces of
gauze remained unaccounted for, that caused injury to Natividad’s body. Clearly, the control and
management of the thing which caused the injury was in the hands of Dr. Ampil, not Dr. Fuentes.

(3) NO.
 55
HIRD DIVISION
G.R. No. 142625 December 19, 2006
ROGELIO P. NOGALES, for himself and on behalf of the minors, ROGER ANTHONY,
ANGELICA, NANCY, and MICHAEL CHRISTOPHER, all surnamed NOGALES, petitioners,
vs.
CAPITOL MEDICAL CENTER, DR. OSCAR ESTRADA, DR. ELY VILLAFLOR, DR. ROSA UY,
DR. JOEL ENRIQUEZ, DR. PERPETUA LACSON, DR. NOE ESPINOLA, and NURSE J.
DUMLAO, respondents.
DECISION
CARPIO, J.:
The Case
This petition for review1 assails the 6 February 1998 Decision2 and 21 March 2000
Resolution3 of the Court of Appeals in CA-G.R. CV No. 45641. The Court of Appeals affirmed in
toto the 22 November 1993 Decision4 of the Regional Trial Court of Manila, Branch 33, finding
Dr. Oscar Estrada solely liable for damages for the death of his patient, Corazon Nogales, while
absolving the remaining respondents of any liability. The Court of Appeals denied petitioners'
motion for reconsideration.
The Facts
Pregnant with her fourth child, Corazon Nogales ("Corazon"), who was then 37 years old, was
under the exclusive prenatal care of Dr. Oscar Estrada ("Dr. Estrada") beginning on her fourth
month of pregnancy or as early as December 1975. While Corazon was on her last trimester of
pregnancy, Dr. Estrada noted an increase in her blood pressure and development of leg
edema5 indicating preeclampsia,6 which is a dangerous complication of pregnancy.7
Around midnight of 25 May 1976, Corazon started to experience mild labor pains prompting
Corazon and Rogelio Nogales ("Spouses Nogales") to see Dr. Estrada at his home. After
examining Corazon, Dr. Estrada advised her immediate admission to the Capitol Medical Center
("CMC").
On 26 May 1976, Corazon was admitted at 2:30 a.m. at the CMC after the staff nurse noted the
written admission request8 of Dr. Estrada. Upon Corazon's admission at the CMC, Rogelio
Nogales ("Rogelio") executed and signed the "Consent on Admission and Agreement" 9 and
"Admission Agreement."10 Corazon was then brought to the labor room of the CMC.
Dr. Rosa Uy ("Dr. Uy"), who was then a resident physician of CMC, conducted an internal
examination of Corazon. Dr. Uy then called up Dr. Estrada to notify him of her findings.
Based on the Doctor's Order Sheet,11 around 3:00 a.m., Dr. Estrada ordered for 10 mg. of valium
to be administered immediately by intramuscular injection. Dr. Estrada later ordered the start of
intravenous administration of syntocinon admixed with dextrose, 5%, in lactated Ringers'
solution, at the rate of eight to ten micro-drops per minute.
According to the Nurse's Observation Notes,12 Dr. Joel Enriquez ("Dr. Enriquez"), an
anesthesiologist at CMC, was notified at 4:15 a.m. of Corazon's admission. Subsequently, when
asked if he needed the services of an anesthesiologist, Dr. Estrada refused. Despite Dr.
Estrada's refusal, Dr. Enriquez stayed to observe Corazon's condition.
At 6:00 a.m., Corazon was transferred to Delivery Room No. 1 of the CMC. At 6:10 a.m.,
Corazon's bag of water ruptured spontaneously. At 6:12 a.m., Corazon's cervix was fully dilated.
At 6:13 a.m., Corazon started to experience convulsions.
At 6:15 a.m., Dr. Estrada ordered the injection of ten grams of magnesium sulfate. However, Dr.
Ely Villaflor ("Dr. Villaflor"), who was assisting Dr. Estrada, administered only 2.5 grams of
magnesium sulfate.
At 6:22 a.m., Dr. Estrada, assisted by Dr. Villaflor, applied low forceps to extract Corazon's baby.
In the process, a 1.0 x 2.5 cm. piece of cervical tissue was allegedly torn. The baby came out in
an apnic, cyanotic, weak and injured condition. Consequently, the baby had to be intubated and
resuscitated by Dr. Enriquez and Dr. Payumo.
At 6:27 a.m., Corazon began to manifest moderate vaginal bleeding which rapidly became
profuse. Corazon's blood pressure dropped from 130/80 to 60/40 within five minutes. There was
continuous profuse vaginal bleeding. The assisting nurse administered hemacel through a
gauge 19 needle as a side drip to the ongoing intravenous injection of dextrose.
At 7:45 a.m., Dr. Estrada ordered blood typing and cross matching with bottled blood. It took
approximately 30 minutes for the CMC laboratory, headed by Dr. Perpetua Lacson ("Dr.
Lacson"), to comply with Dr. Estrada's order and deliver the blood.
At 8:00 a.m., Dr. Noe Espinola ("Dr. Espinola"), head of the Obstetrics-Gynecology Department
of the CMC, was apprised of Corazon's condition by telephone. Upon being informed that
Corazon was bleeding profusely, Dr. Espinola ordered immediate hysterectomy. Rogelio was
made to sign a "Consent to Operation."13
Due to the inclement weather then, Dr. Espinola, who was fetched from his residence by an
ambulance, arrived at the CMC about an hour later or at 9:00 a.m. He examined the patient and
ordered some resuscitative measures to be administered. Despite Dr. Espinola's efforts,
Corazon died at 9:15 a.m. The cause of death was "hemorrhage, post partum." 14
On 14 May 1980, petitioners filed a complaint for damages15 with the Regional Trial Court16 of
Manila against CMC, Dr. Estrada, Dr. Villaflor, Dr. Uy, Dr. Enriquez, Dr. Lacson, Dr. Espinola,
and a certain Nurse J. Dumlao for the death of Corazon. Petitioners mainly contended that
defendant physicians and CMC personnel were negligent in the treatment and management of
 56
Corazon's condition. Petitioners charged CMC with negligence in the selection and supervision
of defendant physicians and hospital staff.
For failing to file their answer to the complaint despite service of summons, the trial court
declared Dr. Estrada, Dr. Enriquez, and Nurse Dumlao in default.17 CMC, Dr. Villaflor, Dr. Uy,
Dr. Espinola, and Dr. Lacson filed their respective answers denying and opposing the allegations
in the complaint. Subsequently, trial ensued.
After more than 11 years of trial, the trial court rendered judgment on 22 November 1993 finding
Dr. Estrada solely liable for damages. The trial court ruled as follows:
The victim was under his pre-natal care, apparently, his fault began from his incorrect
and inadequate management and lack of treatment of the pre-eclamptic condition of
his patient. It is not disputed that he misapplied the forceps in causing the delivery
because it resulted in a large cervical tear which had caused the profuse bleeding
which he also failed to control with the application of inadequate injection of
magnesium sulfate by his assistant Dra. Ely Villaflor. Dr. Estrada even failed to notice
the erroneous administration by nurse Dumlao of hemacel by way of side drip, instead
of direct intravenous injection, and his failure to consult a senior obstetrician at an
early stage of the problem.
On the part however of Dra. Ely Villaflor, Dra. Rosa Uy, Dr. Joel Enriquez, Dr. Lacson,
Dr. Espinola, nurse J. Dumlao and CMC, the Court finds no legal justification to find
them civilly liable.
On the part of Dra. Ely Villaflor, she was only taking orders from Dr. Estrada, the
principal physician of Corazon Nogales. She can only make suggestions in the
manner the patient maybe treated but she cannot impose her will as to do so would be
to substitute her good judgment to that of Dr. Estrada. If she failed to correctly
diagnose the true cause of the bleeding which in this case appears to be a cervical
laceration, it cannot be safely concluded by the Court that Dra. Villaflor had the correct
diagnosis and she failed to inform Dr. Estrada. No evidence was introduced to show
that indeed Dra. Villaflor had discovered that there was laceration at the cervical area
of the patient's internal organ.
On the part of nurse Dumlao, there is no showing that when she administered the
hemacel as a side drip, she did it on her own. If the correct procedure was directly thru
the veins, it could only be because this was what was probably the orders of Dr.
Estrada.
While the evidence of the plaintiffs shows that Dr. Noe Espinola, who was the Chief of
the Department of Obstetrics and Gynecology who attended to the patient Mrs.
Nogales, it was only at 9:00 a.m. That he was able to reach the hospital because of
typhoon Didang (Exhibit 2). While he was able to give prescription in the manner
Corazon Nogales may be treated, the prescription was based on the information given
to him by phone and he acted on the basis of facts as presented to him, believing in
good faith that such is the correct remedy. He was not with Dr. Estrada when the
patient was brought to the hospital at 2:30 o'clock a.m. So, whatever errors that Dr.
Estrada committed on the patient before 9:00 o'clock a.m. are certainly the errors of
Dr. Estrada and cannot be the mistake of Dr. Noe Espinola. His failure to come to the
hospital on time was due to fortuitous event.
On the part of Dr. Joel Enriquez, while he was present in the delivery room, it is not
incumbent upon him to call the attention of Dr. Estrada, Dra. Villaflor and also of Nurse
Dumlao on the alleged errors committed by them. Besides, as anesthesiologist, he
has no authority to control the actuations of Dr. Estrada and Dra. Villaflor. For the
Court to assume that there were errors being committed in the presence of Dr.
Enriquez would be to dwell on conjectures and speculations.
On the civil liability of Dr. Perpetua Lacson, [s]he is a hematologist and in-charge of
the blood bank of the CMC. The Court cannot accept the theory of the plaintiffs that
there was delay in delivering the blood needed by the patient. It was testified, that in
order that this blood will be made available, a laboratory test has to be conducted to
determine the type of blood, cross matching and other matters consistent with medical
science so, the lapse of 30 minutes maybe considered a reasonable time to do all of
these things, and not a delay as the plaintiffs would want the Court to believe.
Admittedly, Dra. Rosa Uy is a resident physician of the Capitol Medical Center. She
was sued because of her alleged failure to notice the incompetence and negligence of
Dr. Estrada. However, there is no evidence to support such theory. No evidence was
adduced to show that Dra. Rosa Uy as a resident physician of Capitol Medical Center,
had knowledge of the mismanagement of the patient Corazon Nogales, and that
notwithstanding such knowledge, she tolerated the same to happen.
In the pre-trial order, plaintiffs and CMC agreed that defendant CMC did not have any
hand or participation in the selection or hiring of Dr. Estrada or his assistant Dra. Ely
Villaflor as attending physician[s] of the deceased. In other words, the two (2) doctors
were not employees of the hospital and therefore the hospital did not have control
over their professional conduct. When Mrs. Nogales was brought to the hospital, it
was an emergency case and defendant CMC had no choice but to admit her. Such
being the case, there is therefore no legal ground to apply the provisions of Article
2176 and 2180 of the New Civil Code referring to the vicarious liability of an employer
for the negligence of its employees. If ever in this case there is fault or negligence in
the treatment of the deceased on the part of the attending physicians who were
employed by the family of the deceased, such civil liability should be borne by the
attending physicians under the principle of "respondeat superior".
WHEREFORE, premises considered, judgment is hereby rendered finding defendant
Dr. Estrada of Number 13 Pitimini St. San Francisco del Monte, Quezon City civilly
liable to pay plaintiffs: 1) By way of actual damages in the amount of P105,000.00; 2)
By way of moral damages in the amount of P700,000.00; 3) Attorney's fees in the
amount of P100,000.00 and to pay the costs of suit.
For failure of the plaintiffs to adduce evidence to support its [sic] allegations against
the other defendants, the complaint is hereby ordered dismissed. While the Court
looks with disfavor the filing of the present complaint against the other defendants by
the herein plaintiffs, as in a way it has caused them personal inconvenience and slight
damage on their name and reputation, the Court cannot accepts [sic] however, the
theory of the remaining defendants that plaintiffs were motivated in bad faith in the
filing of this complaint. For this reason defendants' counterclaims are hereby ordered
dismissed.
SO ORDERED.18
 57

Petitioners appealed the trial court's decision. Petitioners claimed that aside from Dr. Estrada,
the remaining respondents should be held equally liable for negligence. Petitioners pointed out
the extent of each respondent's alleged liability.
On 6 February 1998, the Court of Appeals affirmed the decision of the trial court. 19 Petitioners
filed a motion for reconsideration which the Court of Appeals denied in its Resolution of 21
March 2000.20
Hence, this petition.
Meanwhile, petitioners filed a Manifestation dated 12 April 200221 stating that respondents Dr.
Estrada, Dr. Enriquez, Dr. Villaflor, and Nurse Dumlao "need no longer be notified of the petition
because they are absolutely not involved in the issue raised before the [Court], regarding the
liability of [CMC]."22 Petitioners stressed that the subject matter of this petition is the liability of
CMC for the negligence of Dr. Estrada.23
hospital could not be held liable for its failure to intervene in the relationship of physician-patient
between defendant physician and plaintiff.
On the liability of the other respondents, the Court of Appeals applied the "borrowed servant"
doctrine considering that Dr. Estrada was an independent contractor who was merely exercising
hospital privileges. This doctrine provides that once the surgeon enters the operating room and
takes charge of the proceedings, the acts or omissions of operating room personnel, and any
negligence associated with such acts or omissions, are imputable to the surgeon. 32 While the
assisting physicians and nurses may be employed by the hospital, or engaged by the patient,
they normally become the temporary servants or agents of the surgeon in charge while the
operation is in progress, and liability may be imposed upon the surgeon for their negligent acts
under the doctrine of respondeat superior.33
The Court of Appeals concluded that since Rogelio engaged Dr. Estrada as the attending
physician of his wife, any liability for malpractice must be Dr. Estrada's sole responsibility.

The Court issued a Resolution dated 9 September 200224 dispensing with the requirement to
submit the correct and present addresses of respondents Dr. Estrada, Dr. Enriquez, Dr. Villaflor,
and Nurse Dumlao. The Court stated that with the filing of petitioners' Manifestation, it should be
understood that they are claiming only against respondents CMC, Dr. Espinola, Dr. Lacson, and
Dr. Uy who have filed their respective comments. Petitioners are foregoing further claims against
respondents Dr. Estrada, Dr. Enriquez, Dr. Villaflor, and Nurse Dumlao.
The Court noted that Dr. Estrada did not appeal the decision of the Court of Appeals affirming
the decision of the Regional Trial Court. Accordingly, the decision of the Court of Appeals,
affirming the trial court's judgment, is already final as against Dr. Oscar Estrada.
While it found the amount of damages fair and reasonable, the Court of Appeals held that no
interest could be imposed on unliquidated claims or damages.
The Issue
Basically, the issue in this case is whether CMC is vicariously liable for the negligence of Dr.
Estrada. The resolution of this issue rests, on the other hand, on the ascertainment of the
relationship between Dr. Estrada and CMC. The Court also believes that a determination of the
extent of liability of the other respondents is inevitable to finally and completely dispose of the
present controversy.

Petitioners filed a motion for reconsideration25 of the Court's 9 September 2002 Resolution The Ruling of the Court
claiming that Dr. Enriquez, Dr. Villaflor and Nurse Dumlao were notified of the petition at their
counsels' last known addresses. Petitioners reiterated their imputation of negligence on these
The petition is partly meritorious.
respondents. The Court denied petitioners' Motion for Reconsideration in its 18 February 2004
Resolution.26
On the Liability of CMC
The Court of Appeals' Ruling
Dr. Estrada's negligence in handling the treatment and management of Corazon's condition
which ultimately resulted in Corazon's death is no longer in issue. Dr. Estrada did not appeal the
In its Decision of 6 February 1998, the Court of Appeals upheld the trial court's ruling. The Court
decision of the Court of Appeals which affirmed the ruling of the trial court finding Dr. Estrada
of Appeals rejected petitioners' view that the doctrine in Darling v. Charleston Community
solely liable for damages. Accordingly, the finding of the trial court on Dr. Estrada's negligence is
Memorial Hospital27 applies to this case. According to the Court of Appeals, the present case
already final.
differs from the Darling case since Dr. Estrada is an independent contractor-physician whereas
the Darling case involved a physician and a nurse who were employees of the hospital.
Petitioners maintain that CMC is vicariously liable for Dr. Estrada's negligence based on Article
2180 in relation to Article 2176 of the Civil Code. These provisions pertinently state:
Citing other American cases, the Court of Appeals further held that the mere fact that a hospital
permitted a physician to practice medicine and use its facilities is not sufficient to render the
hospital liable for the physician's negligence.28 A hospital is not responsible for the negligence of Art. 2180. The obligation imposed by article 2176 is demandable not only for one's
a physician who is an independent contractor.29 own acts or omissions, but also for those of persons for whom one is responsible.

The Court of Appeals found the cases of Davidson v. Conole30 and Campbell v. Emma Laing xxxx
Stevens Hospital31applicable to this case. Quoting Campbell, the Court of Appeals stated that
where there is no proof that defendant physician was an employee of defendant hospital or that
defendant hospital had reason to know that any acts of malpractice would take place, defendant
 58
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are not
engaged in any business or industry.
xxxx
The responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family to
prevent damage.
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is
no pre-existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.
Similarly, in the United States, a hospital which is the employer, master, or principal of a
physician employee, servant, or agent, may be held liable for the physician's negligence under
the doctrine of respondeat superior.34
In the present case, petitioners maintain that CMC, in allowing Dr. Estrada to practice and admit
patients at CMC, should be liable for Dr. Estrada's malpractice. Rogelio claims that he knew Dr.
Estrada as an accredited physician of CMC, though he discovered later that Dr. Estrada was not
a salaried employee of the CMC.35 Rogelio further claims that he was dealing with CMC, whose
primary concern was the treatment and management of his wife's condition. Dr. Estrada just
happened to be the specific person he talked to representing CMC. 36 Moreover, the fact that
CMC made Rogelio sign a Consent on Admission and Admission Agreement 37 and a Consent to
Operation printed on the letterhead of CMC indicates that CMC considered Dr. Estrada as a
member of its medical staff.
On the other hand, CMC disclaims liability by asserting that Dr. Estrada was a mere visiting
physician and that it admitted Corazon because her physical condition then was classified an
emergency obstetrics case.38
CMC alleges that Dr. Estrada is an independent contractor "for whose actuations CMC would be
a total stranger." CMC maintains that it had no control or supervision over Dr. Estrada in the
exercise of his medical profession.
The Court had the occasion to determine the relationship between a hospital and a consultant or
visiting physician and the liability of such hospital for that physician's negligence in Ramos v.
Court of Appeals,39 to wit:
In the first place, hospitals exercise significant control in the hiring and firing of
consultants and in the conduct of their work within the hospital premises. Doctors who
apply for "consultant" slots, visiting or attending, are required to submit proof of
completion of residency, their educational qualifications; generally, evidence of
accreditation by the appropriate board (diplomate), evidence of fellowship in most
cases, and references. These requirements are carefully scrutinized by members of
the hospital administration or by a review committee set up by the hospital who either
accept or reject the application. This is particularly true with respondent hospital.
After a physician is accepted, either as a visiting or attending consultant, he is
normally required to attend clinico-pathological conferences, conduct bedside rounds
for clerks, interns and residents, moderate grand rounds and patient audits and
perform other tasks and responsibilities, for the privilege of being able to maintain a
clinic in the hospital, and/or for the privilege of admitting patients into the hospital. In
addition to these, the physician's performance as a specialist is generally evaluated by
a peer review committee on the basis of mortality and morbidity statistics, and
feedback from patients, nurses, interns and residents. A consultant remiss in his
duties, or a consultant who regularly falls short of the minimum standards acceptable
to the hospital or its peer review committee, is normally politely terminated.
In other words, private hospitals, hire, fire and exercise real control over their
attending and visiting "consultant" staff. While "consultants" are not, technically
employees, a point which respondent hospital asserts in denying all
responsibility for the patient's condition, the control exercised, the hiring, and
the right to terminate consultants all fulfill the important hallmarks of an
employer-employee relationship, with the exception of the payment of wages. In
assessing whether such a relationship in fact exists, the control test is
determining. Accordingly, on the basis of the foregoing, we rule that for the
purpose of allocating responsibility in medical negligence cases, an employer-
employee relationship in effect exists between hospitals and their attending and
visiting physicians.This being the case, the question now arises as to whether or not
respondent hospital is solidarily liable with respondent doctors for petitioner's
condition.
The basis for holding an employer solidarily responsible for the negligence of its
employee is found in Article 2180 of the Civil Code which considers a person
accountable not only for his own acts but also for those of others based on the
former's responsibility under a relationship of patria potestas. x x x40 (Emphasis
supplied)
While the Court in Ramos did not expound on the control test, such test essentially determines
whether an employment relationship exists between a physician and a hospital based on the
exercise of control over the physician as to details. Specifically, the employer (or the hospital)
must have the right to control both the means and the details of the process by which the
employee (or the physician) is to accomplish his task.41
After a thorough examination of the voluminous records of this case, the Court finds no single
evidence pointing to CMC's exercise of control over Dr. Estrada's treatment and management of
Corazon's condition. It is undisputed that throughout Corazon's pregnancy, she was under the
exclusive prenatal care of Dr. Estrada. At the time of Corazon's admission at CMC and during
her delivery, it was Dr. Estrada, assisted by Dr. Villaflor, who attended to Corazon. There was no
showing that CMC had a part in diagnosing Corazon's condition. While Dr. Estrada enjoyed staff
privileges at CMC, such fact alone did not make him an employee of CMC. 42 CMC merely
allowed Dr. Estrada to use its facilities43 when Corazon was about to give birth, which CMC
considered an emergency. Considering these circumstances, Dr. Estrada is not an employee of
CMC, but an independent contractor.
The question now is whether CMC is automatically exempt from liability considering that Dr.
Estrada is an independent contractor-physician.
 59
In general, a hospital is not liable for the negligence of an independent contractor-physician.
There is, however, an exception to this principle. The hospital may be liable if the physician is
the "ostensible" agent of the hospital.44 This exception is also known as the "doctrine of apparent
authority."45 In Gilbert v. Sycamore Municipal Hospital,46 the Illinois Supreme Court explained the
doctrine of apparent authority in this wise:
[U]nder the doctrine of apparent authority a hospital can be held vicariously liable for
the negligent acts of a physician providing care at the hospital, regardless of whether
the physician is an independent contractor, unless the patient knows, or should have
known, that the physician is an independent contractor. The elements of the action
have been set out as follows:
"For a hospital to be liable under the doctrine of apparent authority, a plaintiff must
show that: (1) the hospital, or its agent, acted in a manner that would lead a
reasonable person to conclude that the individual who was alleged to be negligent
was an employee or agent of the hospital; (2) where the acts of the agent create the
appearance of authority, the plaintiff must also prove that the hospital had knowledge
of and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of
the hospital or its agent, consistent with ordinary care and prudence."
The element of "holding out" on the part of the hospital does not require an express
representation by the hospital that the person alleged to be negligent is an employee.
Rather, the element is satisfied if the hospital holds itself out as a provider of
emergency room care without informing the patient that the care is provided by
independent contractors.
The element of justifiable reliance on the part of the plaintiff is satisfied if the plaintiff
relies upon the hospital to provide complete emergency room care, rather than upon a
specific physician.
The doctrine of apparent authority essentially involves two factors to determine the liability of an
independent-contractor physician.
The first factor focuses on the hospital's manifestations and is sometimes described as an
inquiry whether the hospital acted in a manner which would lead a reasonable person to
conclude that the individual who was alleged to be negligent was an employee or agent of the
hospital.47 In this regard, the hospital need not make express representations to the
patient that the treating physician is an employee of the hospital; rather a representation
may be general and implied.48
The doctrine of apparent authority is a species of the doctrine of estoppel. Article 1431 of the
Civil Code provides that "[t]hrough estoppel, an admission or representation is rendered
conclusive upon the person making it, and cannot be denied or disproved as against the person
relying thereon." Estoppel rests on this rule: "Whenever a party has, by his own declaration, act,
or omission, intentionally and deliberately led another to believe a particular thing true, and to act
upon such belief, he cannot, in any litigation arising out of such declaration, act or omission, be
permitted to falsify it."49
In the instant case, CMC impliedly held out Dr. Estrada as a member of its medical staff.
Through CMC's acts, CMC clothed Dr. Estrada with apparent authority thereby leading the
Spouses Nogales to believe that Dr. Estrada was an employee or agent of CMC. CMC cannot
now repudiate such authority.
First, CMC granted staff privileges to Dr. Estrada. CMC extended its medical staff and facilities
to Dr. Estrada. Upon Dr. Estrada's request for Corazon's admission, CMC, through its personnel,
readily accommodated Corazon and updated Dr. Estrada of her condition.
Second, CMC made Rogelio sign consent forms printed on CMC letterhead. Prior to Corazon's
admission and supposed hysterectomy, CMC asked Rogelio to sign release forms, the contents
of which reinforced Rogelio's belief that Dr. Estrada was a member of CMC's medical
staff.50 The Consent on Admission and Agreement explicitly provides:
KNOW ALL MEN BY THESE PRESENTS:
I, Rogelio Nogales, of legal age, a resident of 1974 M. H. Del Pilar St., Malate Mla.,
being the father/mother/brother/sister/spouse/relative/ guardian/or person in custody
of Ma. Corazon, and representing his/her family, of my own volition and free will, do
consent and submit said Ma. Corazon to Dr. Oscar Estrada (hereinafter referred to as
Physician) for cure, treatment, retreatment, or emergency measures, that the
Physician, personally or by and through the Capitol Medical Center and/or its
staff, may use, adapt, or employ such means, forms or methods of cure,
treatment, retreatment, or emergency measures as he may see best and most
expedient; that Ma. Corazon and I will comply with any and all rules, regulations,
directions, and instructions of the Physician, the Capitol Medical Center and/or
its staff; and, that I will not hold liable or responsible and hereby waive and forever
discharge and hold free the Physician, the Capitol Medical Center and/or its staff, from
any and all claims of whatever kind of nature, arising from directly or indirectly, or by
reason of said cure, treatment, or retreatment, or emergency measures or intervention
of said physician, the Capitol Medical Center and/or its staff.
x x x x51 (Emphasis supplied)
While the Consent to Operation pertinently reads, thus:
I, ROGELIO NOGALES, x x x, of my own volition and free will, do consent and submit
said CORAZON NOGALES to Hysterectomy, by the Surgical Staff and
Anesthesiologists of Capitol Medical Center and/or whatever succeeding
operations, treatment, or emergency measures as may be necessary and most
expedient; and, that I will not hold liable or responsible and hereby waive and forever
discharge and hold free the Surgeon, his assistants, anesthesiologists, the Capitol
Medical Center and/or its staff, from any and all claims of whatever kind of nature,
arising from directly or indirectly, or by reason of said operation or operations,
treatment, or emergency measures, or intervention of the Surgeon, his assistants,
anesthesiologists, the Capitol Medical Center and/or its staff.52 (Emphasis supplied)
Without any indication in these consent forms that Dr. Estrada was an independent contractor-
physician, the Spouses Nogales could not have known that Dr. Estrada was an independent
contractor. Significantly, no one from CMC informed the Spouses Nogales that Dr. Estrada was
an independent contractor. On the contrary, Dr. Atencio, who was then a member of CMC Board
of Directors, testified that Dr. Estrada was part of CMC's surgical staff. 53
 60
Third, Dr. Estrada's referral of Corazon's profuse vaginal bleeding to Dr. Espinola, who was then
the Head of the Obstetrics and Gynecology Department of CMC, gave the impression that Dr.
Estrada as a member of CMC's medical staff was collaborating with other CMC-employed
specialists in treating Corazon.
The second factor focuses on the patient's reliance. It is sometimes characterized as an inquiry
on whether the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent
with ordinary care and prudence.54
The records show that the Spouses Nogales relied upon a perceived employment relationship
with CMC in accepting Dr. Estrada's services. Rogelio testified that he and his wife specifically
chose Dr. Estrada to handle Corazon's delivery not only because of their friend's
recommendation, but more importantly because of Dr. Estrada's "connection with a reputable
hospital, the [CMC]."55 In other words, Dr. Estrada's relationship with CMC played a significant
role in the Spouses Nogales' decision in accepting Dr. Estrada's services as the obstetrician-
gynecologist for Corazon's delivery. Moreover, as earlier stated, there is no showing that before
and during Corazon's confinement at CMC, the Spouses Nogales knew or should have known
that Dr. Estrada was not an employee of CMC.
Further, the Spouses Nogales looked to CMC to provide the best medical care and support
services for Corazon's delivery. The Court notes that prior to Corazon's fourth pregnancy, she
used to give birth inside a clinic. Considering Corazon's age then, the Spouses Nogales decided
to have their fourth child delivered at CMC, which Rogelio regarded one of the best hospitals at
the time.56 This is precisely because the Spouses Nogales feared that Corazon might
experience complications during her delivery which would be better addressed and treated in a
modern and big hospital such as CMC. Moreover, Rogelio's consent in Corazon's hysterectomy
to be performed by a different physician, namely Dr. Espinola, is a clear indication of Rogelio's
confidence in CMC's surgical staff.
CMC's defense that all it did was "to extend to [Corazon] its facilities" is untenable. The Court
cannot close its eyes to the reality that hospitals, such as CMC, are in the business of treatment.
In this regard, the Court agrees with the observation made by the Court of Appeals of North
Carolina in Diggs v. Novant Health, Inc.,57 to wit:
"The conception that the hospital does not undertake to treat the patient, does not
undertake to act through its doctors and nurses, but undertakes instead simply to
procure them to act upon their own responsibility, no longer reflects the fact. Present
day hospitals, as their manner of operation plainly demonstrates, do far more
than furnish facilities for treatment. They regularly employ on a salary basis a
large staff of physicians, nurses and internes [sic], as well as administrative and
manual workers, and they charge patients for medical care and treatment,
collecting for such services, if necessary, by legal action. Certainly, the person
who avails himself of 'hospital facilities' expects that the hospital will attempt to
cure him, not that its nurses or other employees will act on their own
responsibility." x x x (Emphasis supplied)
Likewise unconvincing is CMC's argument that petitioners are estopped from claiming damages
based on the Consent on Admission and Consent to Operation. Both release forms consist of
two parts. The first part gave CMC permission to administer to Corazon any form of recognized
medical treatment which the CMC medical staff deemed advisable. The second part of the
documents, which may properly be described as the releasing part, releases CMC and its
employees "from any and all claims" arising from or by reason of the treatment and operation.
The documents do not expressly release CMC from liability for injury to Corazon due to
negligence during her treatment or operation. Neither do the consent forms expressly exempt
CMC from liability for Corazon's death due to negligence during such treatment or operation.
Such release forms, being in the nature of contracts of adhesion, are construed strictly against
hospitals. Besides, a blanket release in favor of hospitals "from any and all claims," which
includes claims due to bad faith or gross negligence, would be contrary to public policy and thus
void.
Even simple negligence is not subject to blanket release in favor of establishments like hospitals
but may only mitigate liability depending on the circumstances.58 When a person needing urgent
medical attention rushes to a hospital, he cannot bargain on equal footing with the hospital on
the terms of admission and operation. Such a person is literally at the mercy of the hospital.
There can be no clearer example of a contract of adhesion than one arising from such a dire
situation. Thus, the release forms of CMC cannot relieve CMC from liability for the negligent
medical treatment of Corazon.
On the Liability of the Other Respondents
Despite this Court's pronouncement in its 9 September 200259 Resolution that the filing of
petitioners' Manifestation confined petitioners' claim only against CMC, Dr. Espinola, Dr. Lacson,
and Dr. Uy, who have filed their comments, the Court deems it proper to resolve the individual
liability of the remaining respondents to put an end finally to this more than two-decade old
controversy.
a) Dr. Ely Villaflor
Petitioners blame Dr. Ely Villaflor for failing to diagnose the cause of Corazon's bleeding and to
suggest the correct remedy to Dr. Estrada.60 Petitioners assert that it was Dr. Villaflor's duty to
correct the error of Nurse Dumlao in the administration of hemacel.
The Court is not persuaded. Dr. Villaflor admitted administering a lower dosage of magnesium
sulfate. However, this was after informing Dr. Estrada that Corazon was no longer in convulsion
and that her blood pressure went down to a dangerous level.61 At that moment, Dr. Estrada
instructed Dr. Villaflor to reduce the dosage of magnesium sulfate from 10 to 2.5 grams. Since
petitioners did not dispute Dr. Villaflor's allegation, Dr. Villaflor's defense remains
uncontroverted. Dr. Villaflor's act of administering a lower dosage of magnesium sulfate was not
out of her own volition or was in contravention of Dr. Estrada's order.
b) Dr. Rosa Uy
Dr. Rosa Uy's alleged negligence consisted of her failure (1) to call the attention of Dr. Estrada
on the incorrect dosage of magnesium sulfate administered by Dr. Villaflor; (2) to take corrective
measures; and (3) to correct Nurse Dumlao's wrong method of hemacel administration.
The Court believes Dr. Uy's claim that as a second year resident physician then at CMC, she
was merely authorized to take the clinical history and physical examination of
Corazon.62 However, that routine internal examination did not ipso facto make Dr. Uy liable for
the errors committed by Dr. Estrada. Further, petitioners' imputation of negligence rests on their
baseless assumption that Dr. Uy was present at the delivery room. Nothing shows that Dr. Uy
participated in delivering Corazon's baby. Further, it is unexpected from Dr. Uy, a mere resident
 61

physician at that time, to call the attention of a more experienced specialist, if ever she was In the present case, there is no evidence of Nurse Dumlao's alleged failure to follow Dr.
present at the delivery room. Estrada's specific instructions. Even assuming Nurse Dumlao defied Dr. Estrada's order, there is
no showing that side-drip administration of hemacel proximately caused Corazon's death. No
evidence linking Corazon's death and the alleged wrongful hemacel administration was
c) Dr. Joel Enriquez
introduced. Therefore, there is no basis to hold Nurse Dumlao liable for negligence.

Petitioners fault Dr. Joel Enriquez also for not calling the attention of Dr. Estrada, Dr. Villaflor,
On the Award of Interest on Damages
and Nurse Dumlao about their errors.63 Petitioners insist that Dr. Enriquez should have taken, or
at least suggested, corrective measures to rectify such errors.
The award of interest on damages is proper and allowed under Article 2211 of the Civil Code,
which states that in crimes and quasi-delicts, interest as a part of the damages may, in a proper
The Court is not convinced. Dr. Enriquez is an anesthesiologist whose field of expertise is
case, be adjudicated in the discretion of the court.68
definitely not obstetrics and gynecology. As such, Dr. Enriquez was not expected to correct Dr.
Estrada's errors. Besides, there was no evidence of Dr. Enriquez's knowledge of any error
committed by Dr. Estrada and his failure to act upon such observation. WHEREFORE, the Court PARTLY GRANTS the petition. The Court finds respondent Capitol
Medical Center vicariously liable for the negligence of Dr. Oscar Estrada. The amounts
of P105,000 as actual damages and P700,000 as moral damages should each earn legal
d) Dr. Perpetua Lacson
interest at the rate of six percent (6%) per annum computed from the date of the judgment of the
trial court. The Court affirms the rest of the Decision dated 6 February 1998 and Resolution
Petitioners fault Dr. Perpetua Lacson for her purported delay in the delivery of blood Corazon dated 21 March 2000 of the Court of Appeals in CA-G.R. CV No. 45641.
needed.64 Petitioners claim that Dr. Lacson was remiss in her duty of supervising the blood bank
staff.
SO ORDERED.

As found by the trial court, there was no unreasonable delay in the delivery of blood from the
time of the request until the transfusion to Corazon. Dr. Lacson competently explained the
procedure before blood could be given to the patient.65 Taking into account the bleeding time,
clotting time and cross-matching, Dr. Lacson stated that it would take approximately 45-60
minutes before blood could be ready for transfusion.66 Further, no evidence exists that Dr.
Lacson neglected her duties as head of the blood bank.

e) Dr. Noe Espinola

Petitioners argue that Dr. Espinola should not have ordered immediate hysterectomy without
determining the underlying cause of Corazon's bleeding. Dr. Espinola should have first
considered the possibility of cervical injury, and advised a thorough examination of the cervix,
instead of believing outright Dr. Estrada's diagnosis that the cause of bleeding was uterine
atony.

Dr. Espinola's order to do hysterectomy which was based on the information he received by
phone is not negligence. The Court agrees with the trial court's observation that Dr. Espinola,
upon hearing such information about Corazon's condition, believed in good faith that
hysterectomy was the correct remedy. At any rate, the hysterectomy did not push through
because upon Dr. Espinola's arrival, it was already too late. At the time, Corazon was practically
dead.

f) Nurse J. Dumlao

In Moore v. Guthrie Hospital Inc.,67 the US Court of Appeals, Fourth Circuit, held that to recover,
a patient complaining of injuries allegedly resulting when the nurse negligently injected medicine
to him intravenously instead of intramuscularly had to show that (1) an intravenous injection
constituted a lack of reasonable and ordinary care; (2) the nurse injected medicine
intravenously; and (3) such injection was the proximate cause of his injury.
 62

liability may be imposed upon the surgeon for their negligent acts under the doctrine
of respondeat superior.
Nogales vs Capitol Medical Center
GR No. 142625 December 19, 2006

Facts: Pregnant with her fourth child, Corazon Nogales, who was then 37 y/o was under the
exclusive prenatal care of Dr. Oscar Estrada beginning on her fourth month of pregnancy or as
early as December 1975. While Corazon was on her last trimester of pregnancy, Dr. Estrada
noted an increase in her blood pressure and development of leg edemas indicating
preeclampsia which is a dangerous complication of pregnancy. Around midnight of May 26,
1976, Corazon started to experience mild labor pains prompting Corazon and Rogelio Nogales
to see Dr. Estrada at his home. After examining Corazon, Dr. Estrada advised her immediate
admission to Capitol Medical Center (CMC). Upon her admission, an internal examination was
conducted upon her by a resident-physician. Based on the doctor’s sheet, around 3am, Dr.
Estrada advised for 10mg valium to be administered immediately by intramuscular injection, he
later ordered the start of intravenous administration of syntociron admixed with dextrose, 5% in
lactated ringer’s solution, at the rate of 8-10 micro-drops per minute. When asked if he needed
the services of anesthesiologist, he refused. Corazon’s bag of water ruptured spontaneously and
her cervix was fully dilated and she experienced convulsions. Dr. Estrada ordered the injection
of 10g of magnesium sulfate but his assisting Doctor, Dr. Villaflor, only administered 2.5g. She
also applied low forceps to extract Corazon’s baby. In the process, a 10 x 2.5cm piece of
cervical tissue was allegedly torn. The baby came out in an apric, cyanatic weak and injured
condition. Consequently the baby had to be intubated and resuscitated. Corazon had professed
vaginal bleeding where a blood typing was ordered and she was supposed to undergo
hysterectomy, however, upon the arrival of the doctor, she was already pronounced dead due to
hemorrhage.

Issue: Whether or not in the conduct of child delivery, the doctors and the respondent hospital is
liable for negligence.

Held: Yes. In general, a hospital is not liable for the negligence of an independent contractor-
physician. There is, however an exception to this principle. The hospital may be liable if the
physician is the ostensible agent of the hospital. This exception is also known as the doctrine of
apparent authority.

Under the doctrine of apparent authority a hospital can be held vicariously liable for the negligent
acts of a physician providing care at the hospital, regardless of whether the physician is an
independent contractor, unless the patient knows, or should have known, that the physician is an
independent contractor.

For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that 1.)
the hospital, or its agent, acted in a manner that would lead a reasonable person to conclude
that the individual who was alleged to be negligent was an employee or agent of the hospital; 2.)
Where the acts of the agent create the appearance of authority, the plaintiff must also prove that
the hospital had knowledge of and acquired in them; and 3.) the plaintiff acted in reliance upon
the conduct of the hospital or its agent, consistent with ordinary care and prudence.

Borrowed servant doctrine provides that once a surgeon enters the operating room and takes
charge of the acts or omissions of operating room personnel and any negligence associated with
each acts or omissions are imputable to the surgeon, while the assisting physicians and nurses
may be employed by the hospital, or engaged by the patient, they normally become the
temporary servants or agents of the surgeon in charge while the operation is in progress, and
 63
G.R. No. 97626 March 14, 1997
PHILIPPINE BANK OF COMMERCE, now absorbed by PHILIPPINE COMMERCIAL
INTERNATIONAL BANK, ROGELIO LACSON, DIGNA DE LEON, MARIA ANGELITA
PASCUAL, et al., petitioners,
vs.
THE COURT OF APPEALS, ROMMEL'S MARKETING CORP., represented by ROMEO
LIPANA, its President & General Manager, respondents.
HERMOSISIMA, JR., J.:
Challenged in this petition for review is the Decision dated February 28, 19911 rendered by
public respondent Court of Appeals which affirmed the Decision dated November 15, 1985 of the
Regional Trial Court, National Capital Judicial Region, Branch CLX (160), Pasig City, in Civil
Case No. 27288 entitled "Rommel's Marketing Corporation, etc. v. Philippine Bank of
Commerce, now absorbed by Philippine Commercial and Industrial Bank."
The case stemmed from a complaint filed by the private respondent Rommel's Marketing
Corporation (RMC for brevity), represented by its President and General Manager Romeo
Lipana, to recover from the former Philippine Bank of Commerce (PBC for brevity), now
absorbed by the Philippine Commercial International Bank, the sum of P304,979.74 representing
various deposits it had made in its current account with said bank but which were not credited to
its account, and were instead deposited to the account of one Bienvenido Cotas, allegedly due
to the gross and inexcusable negligence of the petitioner bank.
RMC maintained two (2) separate current accounts, Current Account Nos. 53-01980-3 and 53-
01748-7, with the Pasig Branch of PBC in connection with its business of selling appliances.
In the ordinary and usual course of banking operations, current account deposits are accepted
by the bank on the basis of deposit slips prepared and signed by the depositor, or the latter's
agent or representative, who indicates therein the current account number to which the deposit
is to be credited, the name of the depositor or current account holder, the date of the deposit,
and the amount of the deposit either in cash or checks. The deposit slip has an upper portion or
stub, which is detached and given to the depositor or his agent; the lower portion is retained by
the bank. In some instances, however, the deposit slips are prepared in duplicate by the
depositor. The original of the deposit slip is retained by the bank, while the duplicate copy is
returned or given to the depositor.
From May 5, 1975 to July 16, 1976, petitioner Romeo Lipana claims to have entrusted RMC
funds in the form of cash totalling P304,979.74 to his secretary, Irene Yabut, for the purpose of
depositing said funds in the current accounts of RMC with PBC. It turned out, however, that
these deposits, on all occasions, were not credited to RMC's account but were instead deposited
to Account No. 53-01734-7 of Yabut's husband, Bienvenido Cotas who likewise maintains an
account with the same bank. During this period, petitioner bank had, however, been regularly
furnishing private respondent with monthly statements showing its current accounts balances.
Unfortunately, it had never been the practice of Romeo Lipana to check these monthly
statements of account reposing complete trust and confidence on petitioner bank.
Irene Yabut's modus operandi is far from complicated. She would accomplish two (2) copies of
the deposit slip, an original and a duplicate. The original showed the name of her husband as
depositor and his current account number. On the duplicate copy was written the account
number of her husband but the name of the account holder was left blank. PBC's teller, Azucena
Mabayad, would, however, validate and stamp both the original and the duplicate of these
deposit slips retaining only the original copy despite the lack of information on the duplicate slip.
The second copy was kept by Irene Yabut allegedly for record purposes. After validation, Yabut
would then fill up the name of RMC in the space left blank in the duplicate copy and change the
account number written thereon, which is that of her husband's, and make it appear to be RMC's
account number, i.e., C.A. No. 53-01980-3. With the daily remittance records also prepared by
Ms. Yabut and submitted to private respondent RMC together with the validated duplicate slips
with the latter's name and account number, she made her company believe that all the while the
amounts she deposited were being credited to its account when, in truth and in fact, they were
being deposited by her and credited by the petitioner bank in the account of Cotas. This went on
in a span of more than one (1) year without private respondent's knowledge.
Upon discovery of the loss of its funds, RMC demanded from petitioner bank the return of its
money, but as its demand went unheeded, it filed a collection suit before the Regional Trial
Court of Pasig, Branch 160. The trial court found petitioner bank negligent and ruled as follows:
WHEREFORE, judgment is hereby rendered sentencing defendant
Philippine Bank of Commerce, now absorbed by defendant Philippine
Commercial & Industrial Bank, and defendant Azucena Mabayad to pay the
plaintiff, jointly and severally, and without prejudice to any criminal action
which may be instituted if found warranted:
1. The sum of P304,979.72, representing plaintiffs lost deposit, plus interest
thereon at the legal rate from the filing of the complaint;
2. A sum equivalent to 14% thereof, as exemplary damages;
3. A sum equivalent to 25% of the total amount due, as and for attorney's
fees; and
4. Costs.
Defendants' counterclaim is hereby dismissed for lack of merit.2
On appeal, the appellate court affirmed the foregoing decision with modifications, viz:
WHEREFORE, the decision appealed from herein is MODIFIED in the
sense that the awards of exemplary damages and attorney's fees specified
therein are eliminated and instead, appellants are ordered to pay plaintiff, in
addition to the principal sum of P304,979.74 representing plaintiff's lost
deposit plus legal interest thereon from the filing of the complaint,
P25,000.00 attorney's fees and costs in the lower court as well as in this
Court.3
Hence, this petition anchored on the following grounds:
1) The proximate cause of the loss is the negligence of respondent Rommel
Marketing Corporation and Romeo Lipana in entrusting cash to a dishonest
employee.
 64
2) The failure of respondent Rommel Marketing Corporation to cross-check
the bank's statements of account with its own records during the entire
period of more than one (1) year is the proximate cause of the commission
of subsequent frauds and misappropriation committed by Ms. Irene Yabut.
3) The duplicate copies of the deposit slips presented by respondent
Rommel Marketing Corporation are falsified and are not proof that the
amounts appearing thereon were deposited to respondent Rommel
Marketing Corporation's account with the bank,
4) The duplicate copies of the deposit slips were used by Ms. Irene Yabut to
cover up her fraudulent acts against respondent Rommel Marketing
Corporation, and not as records of deposits she made with the bank.4
The petition has no merit.
Simply put, the main issue posited before us is: What is the proximate cause of the loss, to the
tune of P304,979.74, suffered by the private respondent RMC — petitioner bank's negligence or
that of private respondent's?
Petitioners submit that the proximate cause of the loss is the negligence of respondent RMC and
Romeo Lipana in entrusting cash to a dishonest employee in the person of Ms. Irene
Yabut.5 According to them, it was impossible for the bank to know that the money deposited by
Ms. Irene Yabut belong to RMC; neither was the bank forewarned by RMC that Yabut will be
depositing cash to its account. Thus, it was impossible for the bank to know the fraudulent
design of Yabut considering that her husband, Bienvenido Cotas, also maintained an account
with the bank. For the bank to inquire into the ownership of the cash deposited by Ms. Irene
Yabut would be irregular. Otherwise stated, it was RMC's negligence in entrusting cash to a
dishonest employee which provided Ms. Irene Yabut the opportunity to defraud RMC. 6
Private respondent, on the other hand, maintains that the proximate cause of the loss was the
negligent act of the bank, thru its teller Ms. Azucena Mabayad, in validating the deposit slips,
both original and duplicate, presented by Ms. Yabut to Ms. Mabayad, notwithstanding the fact
that one of the deposit slips was not completely accomplished.
We sustain the private respondent.
Our law on quasi-delicts states:
Art. 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this
Chapter.
There are three elements of a quasi-delict: (a) damages suffered by the plaintiff; (b) fault or
negligence of the defendant, or some other person for whose acts he must respond; and (c) the
connection of cause and effect between the fault or negligence of the defendant and the
damages incurred by the plaintiff.7
In the case at bench, there is no dispute as to the damage suffered by the private respondent
(plaintiff in the trial court) RMC in the amount of P304,979.74. It is in ascribing fault or
negligence which caused the damage where the parties point to each other as the culprit.
Negligence is the omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man would do. The seventy-eight (78)-year-old, yet
still relevant, case of Picart v. Smith,8 provides the test by which to determine the existence of
negligence in a particular case which may be stated as follows: Did the defendant in doing the
alleged negligent act use that reasonable care and caution which an ordinarily prudent person
would have used in the same situation? If not, then he is guilty of negligence. The law here in
effect adopts the standard supposed to be supplied by the imaginary conduct of the
discreet paterfamilias of the Roman law. The existence of negligence in a given case is not
determined by reference to the personal judgment of the actor in the situation before him. The
law considers what would be reckless, blameworthy, or negligent in the man of ordinary
intelligence and prudence and determines liability by that.
Applying the above test, it appears that the bank's teller, Ms. Azucena Mabayad, was negligent
in validating, officially stamping and signing all the deposit slips prepared and presented by Ms.
Yabut, despite the glaring fact that the duplicate copy was not completely accomplished contrary
to the self-imposed procedure of the bank with respect to the proper validation of deposit slips,
original or duplicate, as testified to by Ms. Mabayad herself, thus:
Q: Now, as teller of PCIB, Pasig Branch, will you please
tell us Mrs. Mabayad your important duties and
functions?
A: I accept current and savings deposits from
depositors and encashments.
Q: Now in the handling of current account deposits of
bank clients, could you tell us the procedure you follow?
A: The client or depositor or the authorized
representative prepares a deposit slip by filling up the
deposit slip with the name, the account number, the
date, the cash breakdown, if it is deposited for cash,
and the check number, the amount and then he signs
the deposit slip.
Q: Now, how many deposit slips do you normally
require in accomplishing current account deposit, Mrs.
Mabayad?
A: The bank requires only one copy of the deposit
although some of our clients prepare the deposit slip in
duplicate.
Q: Now in accomplishing current account deposits from
your clients, what do you issue to the depositor to
evidence the deposit made?
 65
A: We issue or we give to the clients the depositor's
stub as a receipt of the deposit.
Q: And who prepares the deposit slip?
A: The depositor or the authorized representative sir?
Q: Where does the depositor's stub comes (sic) from
Mrs. Mabayad, is it with the deposit slip?
A: The depositor's stub is connected with the deposit
slip or the bank's copy. In a deposit slip, the upper
portion is the depositor's stub and the lower portion is
the bank's copy, and you can detach the bank's copy
from the depositor's stub by tearing it sir.
Q: Now what do you do upon presentment of the
deposit slip by the depositor or the depositor's
authorized representative?
A: We see to it that the deposit slip9 is properly
accomplished and then we count the money and then
we tally it with the deposit slip sir.
Q: Now is the depositor's stub which you issued to your
clients validated?
A: Yes, sir. 10 [Emphasis ours]
Clearly, Ms. Mabayad failed to observe this very important procedure. The fact that
the duplicate slip was not compulsorily required by the bank in accepting deposits
should not relieve the petitioner bank of responsibility. The odd circumstance alone
that such duplicate copy lacked one vital information — that of the name of the
account holder — should have already put Ms. Mabayad on guard. Rather than readily
validating the incomplete duplicate copy, she should have proceeded more cautiously
by being more probing as to the true reason why the name of the account holder in the
duplicate slip was left blank while that in the original was filled up. She should not
have been so naive in accepting hook, line and sinker the too shallow excuse of Ms.
Irene Yabut to the effect that since the duplicate copy was only for her personal
record, she would simply fill up the blank space later on. 11 A "reasonable man of
ordinary prudence" 12 would not have given credence to such explanation and would
have insisted that the space left blank be filled up as a condition for validation.
Unfortunately, this was not how bank teller Mabayad proceeded thus resulting in huge
losses to the private respondent.
Negligence here lies not only on the part of Ms. Mabayad but also on the part of the bank itself in
its lackadaisical selection and supervision of Ms. Mabayad. This was exemplified in the
testimony of Mr. Romeo Bonifacio, then Manager of the Pasig Branch of the petitioner bank and
now its Vice-President, to the effect that, while he ordered the investigation of the incident, he
never came to know that blank deposit slips were validated in total disregard of the bank's
validation procedures, viz:
Q: Did he ever tell you that one of your cashiers affixed
the stamp mark of the bank on the deposit slips and
they validated the same with the machine, the fact that
those deposit slips were unfilled up, is there any report
similar to that?
A: No, it was not the cashier but the teller.
Q: The teller validated the blank deposit slip?
A: No it was not reported.
Q: You did not know that any one in the bank tellers or
cashiers validated the blank deposit slip?
A: I am not aware of that.
Q: It is only now that you are aware of that?
A: Yes, sir. 13
Prescinding from the above, public respondent Court of Appeals aptly observed:
xxx xxx xxx
It was in fact only when he testified in this case in February, 1983, or after
the lapse of more than seven (7) years counted from the period when the
funds in question were deposited in plaintiff's accounts (May, 1975 to July,
1976) that bank manager Bonifacio admittedly became aware of the
practice of his teller Mabayad of validating blank deposit slips. Undoubtedly,
this is gross, wanton, and inexcusable negligence in the appellant bank's
supervision of its employees. 14
It was this negligence of Ms. Azucena Mabayad, coupled by the negligence of the petitioner
bank in the selection and supervision of its bank teller, which was the proximate cause of the
loss suffered by the private respondent, and not the latter's act of entrusting cash to a dishonest
employee, as insisted by the petitioners.
Proximate cause is determined on the facts of each case upon mixed considerations of logic,
common sense, policy and precedent. 15 Vda. de Bataclan v. Medina, 16 reiterated in the case
of Bank of the Phil. Islands v. Court of Appeals, 17 defines proximate cause as "that cause,
which, in natural and continuous sequence, unbroken by any efficient intervening cause,
produces the injury, and without which the result would not have occurred. . . ." In this case,
absent the act of Ms. Mabayad in negligently validating the incomplete duplicate copy of the
deposit slip, Ms. Irene Yabut would not have the facility with which to perpetrate her fraudulent
 66
scheme with impunity. Apropos, once again, is the pronouncement made by the respondent
appellate court, to wit:
. . . . Even if Yabut had the fraudulent intention to misappropriate the funds
entrusted to her by plaintiff, she would not have been able to deposit those
funds in her husband's current account, and then make plaintiff believe that
it was in the latter's accounts wherein she had deposited them, had it not
been for bank teller Mabayad's aforesaid gross and reckless negligence.
The latter's negligence was thus the proximate, immediate and efficient
cause that brought about the loss claimed by plaintiff in this case, and the
failure of plaintiff to discover the same soon enough by failing to scrutinize
the monthly statements of account being sent to it by appellant bank could
not have prevented the fraud and misappropriation which Irene Yabut had
already completed when she deposited plaintiff's money to the account of
her husband instead of to the latter's accounts. 18
Furthermore, under the doctrine of "last clear chance" (also referred to, at times as "supervening
negligence" or as "discovered peril"), petitioner bank was indeed the culpable party. This
doctrine, in essence, states that where both parties are negligent, but the negligent act of one is
appreciably later in time than that of the other, or when it is impossible to determine whose fault
or negligence should be attributed to the incident, the one who had the last clear opportunity to
avoid the impending harm and failed to do so is chargeable with the consequences
thereof. 19Stated differently, the rule would also mean that an antecedent negligence of a person
does not preclude the recovery of damages for the supervening negligence of, or bar a defense
against liability sought by another, if the latter, who had the last fair chance, could have avoided
the impending harm by the exercise of due diligence. 20Here, assuming that private respondent
RMC was negligent in entrusting cash to a dishonest employee, thus providing the latter with the
opportunity to defraud the company, as advanced by the petitioner, yet it cannot be denied that
the petitioner bank, thru its teller, had the last clear opportunity to avert the injury incurred by its
client, simply by faithfully observing their self-imposed validation procedure.
At this juncture, it is worth to discuss the degree of diligence ought to be exercised by banks in
dealing with their clients.
The New Civil Code provides:
Art. 1173. The fault or negligence of the obligor consists in the omission of
that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the time and of the
place. When negligence shows bad faith, the provisions of articles 1171 and
2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in
the performance, that which is expected of a good father of a family shall be
required. (1104a)
In the case of banks, however, the degree of diligence required is more than that of a good
father of a family. Considering the fiduciary nature of their relationship with their depositors,
banks are duty bound to treat the accounts of their clients with the highest degree of care. 21
As elucidated in Simex International (Manila), Inc. v. Court of Appeals, 22 in every case, the
depositor expects the bank to treat his account with the utmost fidelity, whether such account
consists only of a few hundred pesos or of millions. The bank must record every single
transaction accurately, down to the last centavo, and as promptly as possible. This has to be
done if the account is to reflect at any given time the amount of money the depositor can dispose
as he sees fit, confident that the bank will deliver it as and to whomever he directs. A blunder on
the part of the bank, such as the failure to duly credit him his deposits as soon as they are made,
can cause the depositor not a little embarrassment if not financial loss and perhaps even civil
and criminal litigation.
The point is that as a business affected with public interest and because of the nature of its
functions, the bank is under obligation to treat the accounts of its depositors with meticulous
care, always having in mind the fiduciary nature of their relationship. In the case before us, it is
apparent that the petitioner bank was remiss in that duty and violated that relationship.
Petitioners nevertheless aver that the failure of respondent RMC to cross-check the bank's
statements of account with its own records during the entire period of more than one (1) year is
the proximate cause of the commission of subsequent frauds and misappropriation committed
by Ms. Irene Yabut.
We do not agree.
While it is true that had private respondent checked the monthly statements of account sent by
the petitioner bank to RMC, the latter would have discovered the loss early on, such cannot be
used by the petitioners to escape liability. This omission on the part of the private respondent
does not change the fact that were it not for the wanton and reckless negligence of the
petitioners' employee in validating the incomplete duplicate deposit slips presented by Ms. Irene
Yabut, the loss would not have occurred. Considering, however, that the fraud was committed in
a span of more than one (1) year covering various deposits, common human experience dictates
that the same would not have been possible without any form of collusion between Ms. Yabut
and bank teller Mabayad. Ms. Mabayad was negligent in the performance of her duties as bank
teller nonetheless. Thus, the petitioners are entitled to claim reimbursement from her for
whatever they shall be ordered to pay in this case.
The foregoing notwithstanding, it cannot be denied that, indeed, private respondent was likewise
negligent in not checking its monthly statements of account. Had it done so, the company would
have been alerted to the series of frauds being committed against RMC by its secretary. The
damage would definitely not have ballooned to such an amount if only RMC, particularly Romeo
Lipana, had exercised even a little vigilance in their financial affairs. This omission by RMC
amounts to contributory negligence which shall mitigate the damages that may be awarded to
the private respondent 23 under Article 2179 of the New Civil Code, to wit:
. . . When the plaintiff's own negligence was the immediate and proximate
cause of his injury, he cannot recover damages. But if his negligence was
only contributory, the immediate and proximate cause of the injury being the
defendant's lack of due care, the plaintiff may recover damages, but the
courts shall mitigate the damages to be awarded.
In view of this, we believe that the demands of substantial justice are satisfied by
allocating the damage on a 60-40 ratio. Thus, 40% of the damage awarded by the
respondent appellate court, except the award of P25,000.00 attorney's fees, shall be
 67

borne by private respondent RMC; only the balance of 60% needs to be paid by the
petitioners. The award of attorney's fees shall be borne exclusively by the petitioners.

WHEREFORE, the decision of the respondent Court of Appeals is modified by reducing the
amount of actual damages private respondent is entitled to by 40%. Petitioners may recover
from Ms. Azucena Mabayad the amount they would pay the private respondent. Private
respondent shall have recourse against Ms. Irene Yabut. In all other respects, the appellate
court's decision is AFFIRMED.

Proportionate costs.

SO ORDERED.
 68

Torts And Damages Case Digest: Philippine Bank Of Commerce V. CA (1997)
G.R. No. 97626 March 14, 1997
Lessons Applicable: Last Clear Chance (Torts and Damages)
FACTS:
May 5, 1975 to July 16, 1976: Romeo Lipana claims to have entrusted RMC funds in the form of
cash totalling P304,979.74 to his secretary, Irene Yabut, for the purpose of depositing said funds
in the current accounts of RMC with Philippine Bank of Commerce (PBC)
They were not credited to RMC's account but were instead deposited to Account No. 53-01734-
7 of Yabut's husband, Bienvenido Cotas
Romeo Lipana never checked their monthly statements of account reposing complete trust and
confidence on PBC
Irene Yabut's modus operandi was to furnish 2 copies of deposit slip upon and both are always
validated and stamped by the teller Azucena Mabayad :
original showed the name of her husband as depositor and his current account number -
retained by the bank
duplicate copy was written the account number of her husband but the name of the account
holder was left blank
After validation, Yabut would then fill up the name of RMC in the space left blank in the duplicate
copy and change the account number to RMC's account number
This went on in a span of more than 1 year without private respondent's knowledge
Upon discovery of the loss of its funds, RMC demanded from PBC the return of its money and
later on filed in the RTC
RTC: PBC and Azucena Mabayad jointly and severally liable
CA: affirmed with modification deleting awards of exemplary damages and attorney's fees
ISSUE:
1. W/N applying the last clear chance, PBC's teller is negligent for failing to avoid the injury by
not exercising the proper validation procedure-YES
2. W/N there was contirbutory negligence by RMC - YES
Here, assuming that RMC was negligent in entrusting cash to a dishonest employee, yet it
cannot be denied that PBC bank, thru its teller, had the last clear opportunity to avert the injury
incurred by its client, simply by faithfully observing their self-imposed validation procedure.
Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which
is required by the nature of the obligation and corresponds with the circumstances of the
persons, of the time and of the place. When negligence shows bad faith, the provisions of
articles 1171 and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in the performance,
that which is expected of a good father of a family shall be required. In the case of banks,
however, the degree of diligence required is more than that of a good father of a family.
Considering the fiduciary nature of their relationship with their depositors, banks are duty bound
to treat the accounts of their clients with the highest degree of care
2. YES.
it cannot be denied that, indeed, private respondent was likewise negligent in not checking its
monthly statements of account. Had it done so, the company would have been alerted to the
series of frauds being committed against RMC by its secretary. The damage would definitely not
have ballooned to such an amount if only RMC, particularly Romeo Lipana, had exercised even
a little vigilance in their financial affairs. This omission by RMC amounts to contributory
negligence which shall mitigate the damages that may be awarded to the private respondent
Article 2179 of the New Civil Code
When the plaintiff's own negligence was the immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was only contributory, the immediate and
proximate cause of the injury being the defendant's lack of due care, the plaintiff may recover
damages, but the courts shall mitigate the damages to be awarded

HELD: 60-40 ratio. only the balance of 60% needs to be paid by the PBC

1. YES.
The fact that the duplicate slip was not compulsorily required by the bank in accepting deposits
should not relieve the PBC of responsibility
The odd circumstance alone that such duplicate copy lacked one vital information (Name of the
account holder) should have already put Ms. Mabayad on guard.
Negligence here lies not only on the part of Ms. Mabayad but also on the part of the bank itself in
its lack in selection and supervision of Ms. Mabayad.
Mr. Romeo Bonifacio, then Manager of the Pasig Branch of the petitioner bank and now its Vice-
President, to the effect that, while he ordered the investigation of the incident, he never came to
know that blank deposit slips were validated in total disregard of the bank's validation
procedures until 7 years later
last clear chance/supervening negligence/discovered peril
where both parties are negligent, but the negligent act of one is appreciably later in time than
that of the other, or when it is impossible to determine whose fault or negligence should be
attributed to the incident, the one who had the last clear opportunity to avoid the impending harm
and failed to do so is chargeable with the consequences thereof
antecedent negligence of a person does not preclude the recovery of damages for the
supervening negligence of, or bar a defense against liability sought by another, if the latter, who
had the last fair chance, could have avoided the impending harm by the exercise of due
diligence.
 69

PHILIPPINE NATIONAL BANK, G.R. No. 173259

Petitioner, In its complaint, it is alleged that [respondent F.F. Cruz & Co., Inc.]
(hereinafter FFCCI) opened savings/current or so-called combo account No. 0219-
830-146 and dollar savings account No. 0219-0502-458-6 with [petitioner Philippine
Present: National Bank] (hereinafter PNB) at its Timog Avenue Branch. Its President Felipe
Cruz (or Felipe) and Secretary-Treasurer Angelita A. Cruz (or Angelita) were the
named signatories for the said accounts.

CORONA, C.J., Chairperson, The said signatories on separate but coeval dates left for and returned
from the Unites States of America, Felipe on March 18, 1995 until June 10, 1995
- versus - LEONARDO-DE CASTRO,
while Angelita followed him on March 29, 1995 and returned ahead on May 9, 1995.
BERSAMIN,
While they were thus out of the country, applications for cashiers and
DEL CASTILLO, and managers [checks] bearing Felipes [signature] were presented to and both approved
by the PNB. The first was on March 27, 1995 for P9,950,000.00 payable to a certain
VILLARAMA, JR., JJ. Gene B. Sangalang and the other one was on April 24, 1995 for P3,260,500.31
payable to one Paul Bautista. The amounts of these checks were then debited by the
PNB against the combo account of [FFCCI].
F.F. CRUZ and CO., INC. Promulgated:
When Angelita returned to the country, she had occasion to examine the
Respondent. July 25, 2011 PNB statements of account of [FFCCI] for the months of February to August 1995
and she noticed the deductions of P9,950,000.00 and P3,260,500.31. Claiming that
x-----------------------------------------------------------x these were unauthorized and fraudulently made, [FFCCI] requested PNB to credit
back and restore to its account the value of the checks. PNB refused, and thus
DECISION constrained [FFCCI] filed the instant suit for damages against the PNB and its own
accountant Aurea Caparas (or Caparas).

DEL CASTILLO, J.:
As between a bank and its depositor, where the banks negligence is the proximate cause of the
loss and the depositor is guilty of contributory negligence, the greater proportion of the loss shall be borne by
the bank.
This Petition for Review on Certiorari seeks to reverse and set aside the Court of
In its traverse, PNB averred lack of cause of action. It alleged that it
exercised due diligence in handling the account of [FFCCI]. The applications for
managers check have passed through the standard bank procedures and it was only
after finding no infirmity that these were given due course. In fact, it was no less than
Caparas, the accountant of [FFCCI], who confirmed the regularity of the transaction.
The delay of [FFCCI] in picking up and going over the bank statements was the
proximate cause of its self-proclaimed injury. Had [FFCCI] been conscientious in this
regard, the alleged chicanery would have been detected early on and Caparas
effectively prevented from absconding with its millions. It prayed for the dismissal of
the complaint.[4]

Appeals January 31, 2006 Decision[1] in CA-G.R. CV No. 81349, which modified the January 30, 2004
Regional Trial Courts Ruling
[2]
Decision of the Regional Trial Court of Manila City, Branch 46 in Civil Case No. 97-84010, and the June 26,

2006 Resolution[3] denying petitioners motion for reconsideration.

The trial court ruled that F.F. Cruz and Company, Inc. ( FFCCI) was guilty of negligence in

clothing Aurea Caparas (Caparas) with authority to make decisions on and dispositions of its account which

paved the way for the fraudulent transactions perpetrated by Caparas; that, in practice, FFCCI waived the
Factual Antecedents
two-signature requirement in transactions involving the subject combo account so much so that Philippine

National Bank (PNB) could not be faulted for honoring the applications for managers check even if only the
The antecedents are aptly summarized by the appellate court:
 70

signature of Felipe Cruz appeared thereon; and that FFCCI was negligent in not immediately informing PNB FFCCI failed to timely examine its monthly statement of account and report the discrepancy to PNB within a

of the fraud. reasonable period of time to prevent or recover the loss. FFCCIs contributory negligence, thus, mitigated the

banks liability. Pursuant to the rulings in Philippine Bank of Commerce v. Court of Appeals[7] and The

On the other hand, the trial court found that PNB was, likewise, negligent in not calling or Consolidated Bank & Trust Corporation v. Court of Appeals,[8] the appellate court allocated the damages on

personally verifying from the authorized signatories the legitimacy of the subject withdrawals considering that a 60-40 ratio with the bigger share to be borne by PNB.

they were in huge amounts. For this reason, PNB had the last clear chance to prevent the unauthorized

debits from FFCCIs combo account. Thus, PNB should bear the whole loss From this decision, both FFCCI and PNB sought review before this Court.

WHEREFORE, judgment is hereby rendered ordering defendant [PNB] to

pay plaintiff [FFCCI] P13,210,500.31 representing the amounts debited against On August 17, 2006, FFCCI filed its petition for review on certiorari which was docketed as G.R. No.
plaintiffs account, with interest at the legal rate computed from the filing of the
complaint plus costs of suit. 173278.[9] On March 7, 2007, the Court issued a Resolution[10] denying said petition. On June 13, 2007, the

Court issued another Resolution[11] denying FFCCIs motion for reconsideration. In denying the aforesaid
IT IS SO ORDERED.[5]
petition, the Court ruled that FFCCI essentially raises questions of fact which are, as a rule, not reviewable

under a Rule 45 petition; that FFCCI failed to show that its case fell within the established exceptions to this
Court of Appeals Ruling
rule; and that FFCCI was guilty of contributory negligence. Thus, the appellate court correctly mitigated PNBs

liability.
On January 31, 2006, the CA rendered the assailed Decision affirming with modification the Decision of the

trial court, viz:

On July 13, 2006, PNB filed its petition for review on certiorari which is the subject matter of this

WHEREFORE, the appealed Decision is AFFIRMED with the MODIFICATION that case.
[PNB] shall pay [FFCCI] only 60% of the actual damages awarded by the trial court
while the remaining 40% shall be borne by [FFCCI].

Issue
SO ORDERED.[6]

Whether the Court of Appeals seriously erred when it found PNB guilty of negligence.[12]
The appellate court ruled that PNB was negligent in not properly verifying the genuineness of the signatures

appearing on the two applications for managers check as evidenced by the lack of the signature of the bank
Our Ruling
verifier thereon. Had this procedure been followed, the forgery would have been detected.

We affirm the ruling of the CA.

Nonetheless, the appellate court found FFCCI guilty of contributory negligence because it clothed

its accountant/bookkeeper Caparas with apparent authority to transact business with PNB. In addition,
 71

PNB is guilty of signature devolved upon the account analyst.[18] However, PNB did not present the account analyst to

negligence. explain his or her failure to sign the box for signature and balance verification of the subject applications for

managers check, thus, casting doubt as to whether he or she did indeed verify the signatures thereon. Third,

Preliminarily, in G.R. No. 173278, we resolved with finality[13] that FFCCI is guilty of contributory we cannot fault the appellate court for not giving weight to the testimonies of Gallego and San Diego

negligence, thus, making it partly liable for the loss (i.e., as to 40% thereof) arising from the unauthorized considering that the latter are naturally interested in exculpating themselves from any liability arising from the

withdrawal of P13,210,500.31 from its combo account. The case before us is, thus, limited to PNBs alleged failure to detect the forgeries in the subject transactions. Fourth, Gallego admitted that PNBs employees

negligence in the subject transactions which the appellate court found to be the proximate cause of the loss, received training on detecting forgeries from the National Bureau of Investigation.[19] However, Emmanuel

thus, making it liable for the greater part of the loss (i.e., as to 60% thereof) pursuant to our rulings Guzman, then NBI senior document examiner, testified, as an expert witness, that the forged signatures in

in Philippine Bank of Commerce v. Court of Appeals[14] and The Consolidated Bank & Trust Corporation v. the subject applications for managers check contained noticeable and significant differences from the

Court of Appeals.[15] genuine signatures of FFCCIs authorized signatories and that the forgeries should have been detected or

observed by a trained signature verifier of any bank.[20]

PNB contends that it was not negligent in verifying the genuineness of the signatures appearing

on the subject applications for managers check. It claims that it followed the standard operating procedure in Given the foregoing, we find no reversible error in the findings of the appellate court that PNB was

the verification process and that four bank officers examined the signatures and found the same to be similar negligent in the handling of FFCCIs combo account, specifically, with respect to PNBs failure to detect the

with those found in the signature cards of FFCCIs authorized signatories on file with the bank. forgeries in the subject applications for managers check which could have prevented the loss. As we have

often ruled, the banking business is impressed with public trust.[21] A higher degree of diligence is imposed on

PNB raises factual issues which are generally not proper for review under a Rule 45 petition. banks relative to the handling of their affairs than that of an ordinary business enterprise.[22] Thus, the degree

While there are exceptions to this rule, we find none applicable to the present case. As correctly found by the of responsibility, care and trustworthiness expected of their officials and employees is far greater than those

appellate court, PNB failed to make the proper verification because the applications for the managers check of ordinary officers and employees in other enterprises.[23] In the case at bar, PNB failed to meet the high

do not bear the signature of the bank verifier. PNB concedes the absence[16] of the subject signature but standard of diligence required by the circumstances to prevent the fraud. In Philippine Bank of Commerce v.

argues that the same was the result of inadvertence. It posits that the testimonies of Geronimo Gallego Court of Appeals[24] and The Consolidated Bank & Trust Corporation v. Court of Appeals,[25] where the banks

(Gallego), then the branch manager of PNB Timog Branch, and Stella San Diego (San Diego), then branch negligence is the proximate cause of the loss and the depositor is guilty of contributory negligence, we

cashier, suffice to establish that the signature verification process was duly followed. allocated the damages between the bank and the depositor on a 60-40 ratio. We apply the same ruling in

this case considering that, as shown above, PNBs negligence is the proximate cause of the loss while the

We are not persuaded. issue as to FFCCIs contributory negligence has been settled with finality in G.R. No. 173278. Thus, the

appellate court properly adjudged PNB to bear the greater part of the loss consistent with these rulings.

First, oral testimony is not as reliable as documentary evidence.[17] Second, PNBs own witness,

San Diego, testified that in the verification process, the principal duty to determine the genuineness of the
 72

WHEREFORE, the petition is DENIED. The January 31, 2006 Decision and June 26, 2006

Resolution of the Court of Appeals in CA-G.R. CV No. 81349 are AFFIRMED.

Costs against petitioner.

SO ORDERED.